Jim Fitzpatrick: On 17 May, my right hon. Friend the Secretary of State announced the Government's response to public consultation on the post office network. Now that the Government have announced their decision, it will be for Post Office Ltd to restructure the network strategically through 50 to 60 local area implementation plans over the next18 months. Following initial input from sub-postmasters, Postwatch and local authorities, the plans will include closure proposals which will then be put to local consultations ahead of the final decision.

Jim Fitzpatrick: The hon. Gentleman knows that the Government have supported Post Office Ltd to the tune of £2 billion since 1999. We are committed to support it with another £1.7 billion until 2011. He neglects the fact that losses have increased from£2 million a week a few years ago to an anticipated£4 million a week this year. The Trade and Industry Committee and the National Federation of Sub-Postmasters both say that that situation is unsustainable. With the new access criteria laid out by the Secretary of State, we are trying to ensure that by 2011 the network is in a much better place and we have a viable national network for the future.

Jim Fitzpatrick: I could refer my hon. Friend to the answer that I gave a moment ago. I am sure that he, too, will make the strongest possible representations for his constituents. However, he must acknowledge that the £4 million a week losses of Post Office Ltd do not present a sustainable position. We want to protectthe network, which is why we are investing a further £1.7 billion and introducing 500 outreach outlets and innovative ways of delivering services, and why we are encouraging Post Office Ltd to develop new products.

Jim Fitzpatrick: It is our view that a strike would damage the industry, so we do not think it would be in the best interests of the company or individual staff members if there were a strike. We hope that the matter can be resolved through constructive discussions.We know and hope that discussions will take place following the Communication Workers Union conference this week. We have demonstrated our commitment by putting our money where our mouth is with additional resources for the company. We do not believe that a strike would be in the interests of the company, the employees or, for that matter, the service.

Danny Alexander: I am grateful to the Secretary of State for that answer. I welcome the announcement made by Ofgem this week about island connections, but does he accept that, whatever the outcome of the Beauly to Denny proposal, a new approach will be needed to meet future transmission needs beyond that proposal? Will he give political leadership and instruct Ofgem to provide the regulatory base to enable a much more ambitious approach to developing a sub-sea transmission network to be taken in future around Britain's coasts to allow the potential of marine renewables to be fully exploited?

Nigel Evans: Looking at the plans for the super grid, it appears that the establishment of more wind turbines is planned inthe North sea, the Irish sea and the channel. As the Secretary of State has said, all that electricity has to be transported. It must be welcome that we are to have more turbines out at sea, because there is less controversy about that. Will he look into the opportunities for under-sea turbines, which could be linked into the same grid?

Alistair Darling: Yes, safety is absolutely paramountat Sellafield and at other nuclear sites. That is whythe responsibility lies with the nuclear installations inspectorate and the Office for Civil Nuclear Security. I am sure that they will do everything they can to ensure that the sites remain secure.

Tony Baldry: Will the Secretaryof State be very kind and clarify the Government's proposals for the future of nuclear power? How much of the costs of Sellafield and the storage and disposal of nuclear waste will be met by the state and how much will have to be met by the private sector?

Alistair Darling: In relation to much of the waste at Sellafield at the moment, we set up the Nuclear Decommissioning Authority to fund its disposal. It will almost certainly be stored in deep underground facilities. I think the hon. Gentleman was getting at what would happen in respect of waste that may come from any new nuclear plant that is built. We havesaid that the industry—the generators who make proposals—will have to meet the construction, running and decommissioning costs, and thus their share of the storage. There could be a joint storage facility, in which case they will have to pay their share. Although we might wish things were otherwise in relation to historic waste, the problem has been building up since the 1940s and I am afraid that it will have to be substantially dealt with by the public sector.

Michael Clapham: My right hon. Friend will be aware that in addition to Sellafield the operation of nuclear stations generally presents safety and security challenges. Is he aware that the latest figures show that staff numbers at the Health and Safety Executive, which includes the nuclear installations inspectorate, will have fallen by17 per cent. by 2008? Will he give an assurance that the inspectorate's staff is kept at an appropriate level and that the health and safety regime at nuclear stations, which covers workers under the Health and Safety at Work, etc. Act 1974, will also be maintained?

Susan Kramer: Let me press further on the issue of social tariffs, because average domestic energy costs are still more than £1,000 a year. In the White Paper, the Secretary of State that he would require companies to put in place
	"a proportional programme of assistance"
	for vulnerable customers. Will the Minister tell us what that means and how long the energy supply companies will have until he finally puts in place minimum standards for social tariffs? Perhaps he could indicate what those standards would be.

Malcolm Wicks: I understand my hon. Friend's point. He is an acknowledged expert in the field and a passionate advocate of the need to tackle the terrible problem of fuel poverty. The significant point about the 50 per cent. figure is that, with the increase in the importance of the energy efficiency commitment,even if that percentage comes down, more actual help will go to vulnerable households, because of the development of the size of the programme.

Jim Fitzpatrick: As I said, that role, and responsibility for the pricing regime and the impact assessment, rests with Postcomm. It is carrying out its review, and has set a programme that runs until 2010. It made an adjustment last year, when it introduced prices in proportion, but that role and responsibility lieswith it.

Alistair Darling: If he has not already done so, thehon. Gentleman might like to read the consultation document on the future of nuclear power that we published a couple of weeks ago, in which many of those issues are considered. On sites, the Jackson report, which was published on the same day as the energy White Paper, looks at the various criteria that will be considered, and obviously the suitability of existing sites is one of those. As I have said, I think it more likely than not that any new build will be on existing sites, but an assessment would have to be made on whether such an existing site would be suitable for new building in the future.

Jim Fitzpatrick: Obviously, there is regret at the loss of jobs at Dairy Crest and the impact that it will have on local people and the local economy in Totnes. However, as the hon. Gentleman knows, Jobcentre Plus is working closely with the company to ensure that employees affected receive the advice and supportthat they need to find alternative employment. An application for designated large-scale redundancy status is being prepared that would provide immediate access to Jobcentre Plus jobsearch and training programmes. The regional development agency is also in discussion with South Hams district council about the future employment use of the site. I know that the hon. Gentleman has a meeting with my right hon. Friend the Minister for Industry and the Regions in a few days' time.

Meg Munn: Action Plan, published in March, sets out the actions that the Government are taking to implement the convention. Ratification without full implantation would be an empty gesture. The inter-ministerial group on human trafficking monitors progress on both implementation of the action plan and the convention. In line with convention requirements, we already operate a 30-day reflection and recovery period for victims accepted on to the POPPY project, but we will, of course, consider whether there is a need to adopta longer period. The convention imposes a set of minimum requirements.

John Barrett: What would the Minister say to a number of groups who are increasingly concerned that women who have been trafficked are often treatedas criminals rather than victims of crime? What discussions is she having with other Departments on the provisions for those women?

Meg Munn: My hon. Friend is absolutely right,and I am pleased to say that the Department for International Development has given the issue some priority. It has a strategy on the matter, and its actions in relation to preventing trafficking at source are integral to our UK action plan.

Eleanor Laing: The fact that so many questions about this subject are on the Order Paper shows the strength of feeling in the House, and rightly so. Fortunately, there is no need for the moral debate that took place in the times of Wilberforce, because every Member of the House hates the evil of modern slavery, and we all want to stop it. I commend the Government on what they have done so far, but will the Minister tell the House whether they are taking steps to co-ordinate the powers of the various public authorities who have responsibilitiesin this matter, such as those relating to police, immigration, licensing, health and safety and so on? Only through an orchestrated approach right across the board will we be able to counteract this dreadful, evil crime.

Meg Munn: I entirely agree. That is why, when I talk about trafficking, I refer particularly to the United Kingdom Human Trafficking Centre, which brings together a range of disciplines. The hon. Lady has raised some issues that go beyond what the centredoes, but I know that it is aiming for the mosteffective practice possible, and I believe that through co-ordination—with people working together in the same centre—we can achieve the objectives that she has rightly identified.

Simon Hughes: I know that every school musthave an anti-bullying policy. Will Ministers consider whether that policy should include a requirement for a specific anti-homophobic bullying element, and also whether one teacher in each school, primary and secondary, should be given responsibility for ensuring that the policy is implemented and effective?

Theresa May: I thank the Leader of the House for giving us the future business.
	In April, after the British naval personnel weretaken hostage by the Iranians, the Secretary of State for Defence ordered two separate reviews—one intothe media handling of the incident, and by one by Lieutenant General Sir Rob Fulton into the operational lessons learned. Yesterday, Lord Grayson committed to a debate on the Fulton report in the other place. Can we have a debate on that report in this House in Government time before the summer recess? Can we also have a separate debate on the review of the media handling of the incident?
	Last night, Conservative, Liberal and Cross-Bench peers voted to create a lifeboat fund for people whose pensions schemes have collapsed. As happened with the votes in this place, the Prime Minister and the Chancellor ordered Labour peers to vote against the proposals, which would have given fair compensation to the 125,000 people who have lost their pensions under this Government. The proposals could be paid for by using unclaimed assets and a Treasury loan, as we did after the Maxwell fiasco, so can we have a debate on why the Chancellor is refusing to help people who did the right thing and saved for their pensions, but lost out through no fault of their own?
	The current Prime Minister is about to negotiate a European treaty that will have to be ratified by the Prime Minister-designate. The Prime Minister wants to revive parts of the failed EU constitution, including the surrender of the veto in the justice and home affairs pillar. The French Presidents says:
	"I have spoken to Blair about this and I don't think that one country will carry the risk of blocking Europe."
	The chairman of the Home Affairs Committee says that there is no evidence to justify
	"such a major transfer of power away from member states"
	and that it should not be agreed without a full parliamentary debate. May we have such a debate?
	Two of Labour's deputy leadership candidates want more taxpayers' money to go to the unions. The Solicitor-General said:
	"We should do more to fund the trade unions"
	and the Labour party chairman said:
	"A Labour Government can expand the Union Modernisation Fund".
	Last year, unions received £3 million of taxpayers' money through that fund. In the rest of the year, those same unions gave £4.3 million to the Labour party. In the next few years, a further £7 million of taxpayers' money will be given to the unions, who will continue to fund the Labour party. May we have a debate on back-door funding of the Labour movement?
	Finally, last month the Secretary of State for Communities and Local Government announced that home information packs would be delayed until August, and then would not be needed for all houses. Imagine the surprise, therefore, for readers of "South West Property Magazine" when they saw an advertisement saying that
	"every home put on the market now needs a Home Information Pack."
	Who is the advert from? A confused estate agent? An uninformed property consultant? No; it comes from Her Majesty's Government. Just when homeowners thought that HIPs could not get any more confusing, the Secretary of State and the Minister for Housing and Planning have done it again—the Laurel and Hardy of the property market. May we have a statement on how much taxpayers' money was wasted on those erroneous and misleading advertisements?

Jack Straw: I recognise the importance of a debate on the Fulton report and the associated Hall report about the media. I cannot make a promise, but I will consider whether it is possible for there to be an occasion when those can be debated. I will also consider an oral statement on the reports.
	On the right hon. Lady's second point—the decision of the other place yesterday in respect of pensions—if it were as easy and simple as she and her party are suggesting to use the so-called unclaimed assets, Iam almost certain that my right hon. Friend the Chancellor would have accepted that. The truth, however, is that it is not. It is highly irresponsible to pretend that those assets can be used in that way. As was made clear by Lord Turnbull, a Cross-Bench peer and former permanent secretary at the Treasury and a Cabinet Secretary, if the so-called unclaimed assets were used in the way proposed, that would be a fraud on hundreds of thousands of holders of with-profits schemes who typically have far lower pensions than they will get as a result of the proposals, to which we have already agreed, to bail out the failed pension schemes. What the right hon. Lady proposes is not a wise move, and it is further proof that the Conservative party is still in Opposition mode and has no sense of the sort of decisions that it must make if it is to mount a serious bid to be elected to Government.
	On the European treaty, and as has been made clear time and again, any decisions made in principle in negotiations at the European Council will then be subject to a formal intergovernmental conference—as they must be as it is an international treaty and not just another European Union instrument—and after that to a full parliamentary debate in this House. The German presidency and others have already made it clear that they have no intention of seeking to revive the 300-plus pages version of the EU constitution. They are talking about amending treaties to make the EU more efficient, which is in our interest. If the right hon. Lady had read the Home Affairs Committee report, rather than just a selective quotation, she would know that it says—to paraphrase—that there could be merit in this country being involved in qualified majority voting in certain areas of justice and home affairs. That would be better than the current situation of informal groupings of countries making decisions over which we cannot have any control.
	The right hon. Lady's point about the trade unions was an example of the old Tory party, as it was a wholly unjustifiable attack on the movement— [Interruption.] I am glad to note that the rest of the Tory party is equally unreconstructed, because there are millions of trade unionists who do not pay the Labour party levy but who are keen on their union. To offend those millions of people, as well as those who voluntarily pay the political levy, is an error by the Conservative party. In the 1980s and early 1990s, there was one partisan attack after another on the trade unions. The Conservative party is the only party that has ever sought to change adversely the funding of another party without doing anything about its own funding. I had thought that there was a general consensus to leave things where they were following the 1992 decisions. I am sorry to note that that is not the case.
	On a lighter note, I am grateful to the right hon. Lady for drawing to my attention an advertisement in the "South West Property Magazine". I had not seen it because I live in SE and we do not get that magazine posted through our doors as we are on the wrong side of the tracks—SW starts just down the road.

David Heath: It is a good to have confirmation that for the Government "south-west" means south-west London and no further. I note that a statement by the Home Secretary is to follow. Will the Leader of the House confirm that that means that a terrorism Bill and, probably, a criminal justice Bill will not now be introduced in this Session? Will he give the House an assurance that if they are introduced very late this Session, they will not be subject to the carry-over procedures?
	Revelations in  The Guardian today and further evidence in "Panorama" next week on the al-Yamamah affair suggest that we need a statement by the Secretary of State for Defence on whether his Department connived in breaches, or potential breaches, of corruption legislation and the Anti-terrorism, Crime and Security Act 2001. Will the Leader of the House ensure that that statement is made and will he ensure, too, that the extant National Audit Office reports are published?
	May we have a statement from the Chancellor of the Exchequer about his current view—I say "current" because it is evolving—of the generous tax relief afforded by taper relief on capital gains tax, which enables private equity entrepreneurs to pay as little as 10 per cent. tax on their very generous income while their cleaners, on little more than the national minimum wage, pay 20 per cent.? Is that really Labour party policy? Lastly, may we have a debate on the Government's attitude to freedom of information? For once, that does not relate to the private Member's Bill, but to the decision by the Office of Government Commerce to destroy the gateway review documents on the cost of identity cards and other misdirectedand mismanaged IT schemes, in defiance of the Information Commissioner and the information tribunal. One gateway reviewer said that the order to destroy the reports was
	"odd and a little sinister".
	That applies to many aspects of government, but we need clarification of precisely whether the Government support their own legislation on freedom of information.

Jack Straw: First, I abjectly apologise to the House— [ Interruption. ]—and to the south-west. I made the error of thinking that because the righthon. Member for Maidenhead (Mrs. May) representsa constituency not far from south-west London,but a very long way from south-west England — [ Interruption. ] I used to be expert on the counties of Britain—and I still am—but I am happy to have a geography lesson.
	On the second point made by the hon. Member for Somerton and Frome (Mr. Heath) about Bills, I am sorry that I cannot give him the precise undertakings for which he asked. Let us wait and see what my right hon. Friend the Home Secretary has to say. If appropriate, I will write to the hon. Gentleman and place a copy of the letter in the Library of the House.
	On the hon. Gentleman's third question about BAE and the al-Yamamah contract, I repeat that my right hon. Friend the Prime Minister said this morning, namely, that he was
	"not going to comment on the individual allegations and a lot of this relates to things that go back to the 1980s".
	I endorse what he went on to say:
	"This investigation, if it had gone ahead, would have involved the most serious allegations and investigation being made of the Saudi royal family and my job is to give advice as to whether that is a sensible thing in circumstances".
	My right hon. Friend explained why he thought that it was not.
	I say to the hon. Gentleman—and to the House, too—that it is worth the Liberal Democrat party, in particular, noting the judgment in the administrative court at the end of last week by Mr. Justice Collins, who, in respect of an application for judicial review of the decision to suspend that investigation, said thatthe application was "wholly unarguable", and he dismissed it.
	I note what the hon. Gentleman had to say on taper relief, and I will refer the matter to my right hon. Friend the Chancellor of the Exchequer. On freedom of information, my understanding is that the gateway reviews have not been destroyed, but given that the hon. Gentleman and his party supported the Freedom of Information Act 2000, they need to bear in mind that it does not say that anybody who wishes to get information from a public authority may automatically have it made available. The Act provides a whole series of exemptions, which are there, among other things, to ensure the proper functioning of government. In the unlikely event of the Liberal Democrats ever—ever—being in government, they would find the same thing, too.

Stephen Hepburn: The Leader of the House will be aware of next Wednesday's ten-minute Bill, tabled by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan), which proposes to extend the Gangmasters (Licensing) Act 2004 to the construction industry. Can we havea debate on that issue as soon as possible, so that Members can highlight the terrible impact that gangmasters are having on the construction industry in the north-east in terms of violence, intimidation, illegal deduction of earnings and dangerous working conditions?

Jack Straw: Because the hon. Gentleman has been assiduous in raising this matter, I have gone into it in some detail. I understand the concerns in his part of Hertfordshire about the reconfiguration of the health service, and I know that such reconfigurations, which happen across the country, can be difficult. However, he will be aware that Professor Graham Ramsay, medical director of West Hertfordshire Hospitals NHS Trust, said:
	"It's increasingly clear that if we consolidate key services and bring specialist clinicians together into specialist teams their skills improve and the outcome for patients is better."
	I know that that is not the hon. Gentleman's view, but it is the view of Professor Ramsay and other senior clinicians. Secondly, any Government, including one that the hon. Gentleman supported, would have toface some quite difficult decisions in his part of Hertfordshire about the configuration of the hospital service. Whether or not it would mean that there would be no hospital in his area is another matter.

Fraser Kemp: Will the Leader of the House join me and Sunderland city council in welcoming the regional transport board's recent decision to approve thenew central route in my constituency? It is a major transport corridor that will have a big impact in relieving congestion and opening up access to the Rainton Bridge industrial site, where thousands of new jobs will be created. Will he use his good offices with the Department for Transport to ensure its full co-operation and the early completion of that major route, especially in former coal mining areas?

George Young: May we have a debate on the costs of Government and the number of Ministers? For the past month, a fifth of the Cabinet has been away from their desks promoting their candidacy for the deputy leadership of the Labour party and the Prime Minister has been largely absent on a world tour. The Leader of the House seems to be running the country on his own, but can he assure the House that the Chancellor of the Exchequer willbe able to run a more streamlined and economical Administration?

Jack Straw: I understand the concern that myhon. Friend raises. The Minister of State, Ministry of Justice, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) has rightly published that consultative document and will certainly give consideration as to when and whether that can be debated.

Jack Straw: I know that the Liberal Democrats livein a dream world, but the world is not perfect. The Government faced the prospect of co-operation on national security being withdrawn, and rightly made the judgment—and I am glad to say that the Conservative Opposition accepted the explanation—that that had to override other considerations. That is leaving aside the fact that, to paraphrase the comments by my right hon. and learned Friend the Attorney-General on 16 December last year, in his judgment the evidential tests would be unlikely to be fulfilled. The hon. Gentleman needs to read the full judgment by Mr. Justice Collins, who said that the case being put forward was unarguable. He also said that
	"it is clear that national security must always prevail, and no State could be expected to take action which jeopardises the security of the State or the lives of its citizens."
	The Liberal Democrats have to understand that there are difficult choices to be made, but we face a serious terrorist threat. We vitally need—and have received—co-operation from, among others, the kingdom of Saudi Arabia. My right hon. Friend the Prime Minister was right to seek not to jeopardise that, and he has the endorsement of a senior High Court judge for that decision.

Nicholas Winterton: The Leader of the House will be aware that Edinburgh university has decided to remove an honorary degree from Mr. Mugabe of Zimbabwe. American universities are about to take similar action. Is it not a pity that more action was not sought by the Prime Minister in his recent visit to South Africa, because the peopleof Zimbabwe are starving and brutalised and the economy is deteriorating rapidly? After all the assurances that the Leader of the House has given me in recent months, can he now tell me that we will have a debate on the issue on the Floor of the House so that we can explore what can be done about the tragedy in what was one of the most prosperous and improving countries in central southern Africa?

Jack Straw: The whole House shares the profound concern about Zimbabwe and the horror at what is now happening. I do not wish to make this a partisan issue, although the hon. Gentleman started to go that way, so it would be unseemly to remind the House thatit was a previous Conservative Administration who awarded Robert Mugabe an honorary knighthood —[ Interruption. ] Well, it is not possible to take it away, otherwise that would have been done. We are indeed promising to have a debate and I hope to be able to make an announcement shortly.

Jack Straw: May I, Mr. Speaker, from a position of total sycophancy say that you are absolutely right? However, I can tell the hon. Member for New Forest, West (Mr. Swayne) that I wish that the matter was that simple. The truth is that all the problems that I faced when I was Home Secretary arose—

Hon. Members: Look behind you!

Jack Straw: I see that my right hon. Friend the present Home Secretary has arrived, but the difficulties that I faced when I was in that post arose even though the Sessional Orders were still being passed. The problem is deeply frustrating for all of us: we all want an end to it, but the question is how we find a way through.

David Anderson: Is my right hon. Friend aware that for the past three years local government workers have been trying to negotiatetheir future pensions with no success? Can we have a statement about exactly where the Government stand on this?

Jack Straw: I am aware of the concerns expressedby my hon. Friend and a number of trade unions, particularly Unison. As he knows, discussions are continuing, involving my hon. Friend the Minister for Local Government, local government associations and trade unions on what we hope is a more positive way forward.

Madeleine Moon: May we have a debate on mobile telephone communication systems for our brave young men fighting in Iraq? Two weeks before going to Iraq, Private Jones, one of my constituents, took out a mobile phone contract with 3, only to find that it did not operate in Iraq. Nevertheless he is expected to pay a standing charge, despite not being able to communicate with his family at a time of great stress and difficulty. Can we look at how we can support our young people and make sure that companies sell them products that are fit for purposein Iraq?

Jack Straw: My hon. Friend raises an important matter and I shall certainly pursue it with my right hon. Friend the Secretary of State for Defence as well as with the Secretary of State for Trade and Industrywho could perhaps talk to the telecommunications companies concerned.

Jack Straw: I know that my hon. Friend has beenvery concerned indeed about this tragic case and its implications. I will certainly follow it up. My right hon. Friend the Home Secretary is in his place as we speak and has taken note of this. We will give consideration to a written ministerial statement on the matter.

Peter Bone: Today every household in the country on average pays£4,280 a year to fund the NHS. That is a staggering175 per cent. increase since the Government came to power. Yet, the number of patients treated has increased by only 29 per cent. Is it not time that we had a proper debate on this extraordinary and shameful financial mismanagement of the NHS by the Government?

John Reid: With permission, Mr. Deputy Speaker, I will make a statement on counter-terrorism. The House will know that we face an unprecedented threat from terrorism. It is the duty of the Home Secretary to ensure that our response provides the best possible protection against that threat, on a personal, local and national level. That is why we have already increased spending on counter-terrorism to £2.25 billion in 2007-08. It is why our security services have never been better resourced. Since 2001, MI5 has doubled the number of people it employs. We have given greater powers to the police, such as increasing the length of time they can detain terrorist suspects from 14 to28 days.
	Furthermore, in April we refocused the Home Office to concentrate on more effectively protecting the public and securing our future. The new Home Office brings together responsibility for managing the Government's counter-terrorism strategy, including the new Officefor Security and Counter-Terrorism. In pursuit ofthe same objectives, we have now completed a comprehensive review of potential counter-terrorist legislation. Legislation forms a relatively small but vital part of our response to the terrorism threat. It sends a signal to those who wish to plot terror and turn people towards violent extremism that their actions will not be tolerated, as well as offering substantial protection. This threat is continuously evolving. It is crucial that our responses evolve with it, to include legislation that is effective and proportionate, to provide the maximum possible security and liberty for the law-abiding majority.
	In approaching this, I have tried to incorporate three elements. First, I want to strengthen our capability to counter terrorism and protect this country from acts of terrorism. Secondly, I want to try to ensure that as we increase these powers we also, where appropriate, increase the parliamentary, judicial and sometimes public scrutiny to ensure a counterbalance against any arbitrary use of these strengthened powers. That is essential in a democratic society. Thirdly, it is my intention, wherever possible, to proceed to build national consensus on national security—in other words, to build, wherever possible, cross-party and cross-Parliament support for the measures being introduced. That is why I shall spend some time today explaining the process that I envisage as well as the measures. It is in that context and spirit that we will bring forward new counter-terrorism proposals in a new counter-terrorism Bill later this year. Today, I want to outline our approach and the main areas of the law that it might strengthen.
	I start from the position that it is desirable toreach a consensus on national security wherever possible, so I want to ensure that there is extensive consultation before any legislation is introduced. Today's announcement is only the start of thatprocess. For good reasons, previous counter-terrorism legislation has been fast-tracked through Parliament. We have an opportunity here to do things differently. That is why my right hon. Friend the Prime Minister, my hon. Friend the Minister for Security, Counter Terrorism and Police and I have already met members of the Opposition.
	Today, following these meetings we will outline the main areas and direction of measures that we wish to pursue. We will then conduct further discussionsand consultation, after which we will produce further detail, including a full Bill content paper, which will inform further discussion. It has been said to me, and I accept, that the devil is often in the detail of proposals, so we will then share draft clauses before introduction and seek the scrutiny not only of Opposition parties but of the Home Affairs Select Committee and the Joint Committee on Human Rights on key areas of the legislation.
	I have also today asked Lord Carlile, the independent reviewer of counter-terrorism legislation, to undertake a report on what is proposed. In addition to discussions that we will have in Parliament,with colleagues on my own Back Benches and in the Opposition, I am also committing the Government to discussing fully with those organisations that havean interest in the proposed legislation—the police, representatives of the judiciary, civil liberties groups and communities. I hope that the House will accept that this is a more comprehensively consensual approach than we have ever taken before. It is thebest way to approach establishing national security measures. To begin the consultation, I have today produced a short document; copies will be placed in the Vote Office and it will be available on the Home Office website.
	I now turn to a number of specific areas, of which the first is pre-charge detention. The decision to increase pre-charge detention limits from 14 to 28 days has, I believe, been justified by subsequent events and means that we have been able to bring forward prosecutions that otherwise might not have been possible. For our part, we have made it clear that the Government's position is that we believe it is right for terrorist cases—I stress terrorist cases—to go beyond 28 days, where necessary; but I want wherever possible to build broad agreement on the way forward. I would, therefore, like to begin discussions now on how we might do that. I am not being definitive, but one way might be to legislate now to extend the current limit while making it clear that there would be extra further judicial and parliamentary oversight if such measures were ever implemented. That would obviously continue to include judicial approval every seven days for any request to hold suspects. It might also, for instance, include further detailed annual reports to Parliament on the pattern of use of such events, with an accompanying parliamentary debate. That is one example, but we will discuss it further with all interested parties, including the Opposition.
	Beyond that, there are other measures—for instance, on post-charge questioning. We are planning to legislate so that in terrorist cases suspects can be questioned after charge on any aspect of the offence with which they have been charged. With regard to adverse inferences drawn from that, we would apply the same rules for post-charge questioning as those that currently apply to pre-charge questioning. In addition, we are considering notification requirements, similar to those already in place for sex offenders, for convicted terrorists who leave prison.
	Where terrorists are charged with general offences, we believe the sentences should be enhanced to reflect the additional seriousness that terrorist involvement represents.
	The House will know that I do not consider control orders to be our best or most effective option in countering terrorism. However, having said that, we need to make what we can of them, so we are proposing a number of changes to control orders, including measures relating to fingerprinting, DNA and powers of entry that do not exist at present, but need to exist to enhance the effectiveness of not entirely satisfactory measures that would benefit from strengthening. However, we do not want to propose any amendments at this stage that might pre-empt forthcoming judgments from the House of Lords.
	I accept that measures on data sharing and DNA are always difficult and controversial for the House, but we would also like to legislate to place data sharing powers for the intelligence and security agencies on a statutory basis, and put the police's counter-terrorist DNA database on a similar statutory footing to the national DNA database. I stress that neither of those measures will alter the powers of the police and agencies to collect material.
	On the subject of intercept as evidence, the Government's position has consistently been that we would change the law to permit intercept evidence only if the necessary safeguards could be put in place to protect sensitive techniques and to ensure that the potential benefits outweigh the risks. I have not personally been persuaded that this is the case, but I accept that the right approach is to address the issue carefully and fully before deciding whether to use intercept as evidence. That is what we are, and have been, doing. However, we believe that we now need to reach a conclusion on the issue. Therefore, subject to further discussions to agree the structure and time scale, I am today confirming and announcing to the House that we will commission a review of intercept as evidence on Privy Council terms.
	There has been some discussion of stop and question outside in the press. Consideration of powers to stop and question, currently available to police in Northern Ireland and suggested for introduction across the UK by the Northern Ireland Office, is at a very early stage and is currently subject to a process of internal Government consultation, and we will report the outcome of that in due course.
	I believe that terrorism remains the greatest threatto the life and liberty of this nation and the many individuals who make up this country. It is the greatest challenge we face and it is important that our legislation continues to evolve to meet that threat, just as the terrorists will continue to evolve and advance their means of constituting it; but I firmly believe that any legislation to deal with that threat to national security should be taken forward with the full support of the House, where possible. I hope that the process I have outlined today will enable us to do that to the greatest effect.

David Davis: I thank the Home Secretary for sight of his statement. The Leader of the Opposition and I have been in consultation with him and the Prime Minister on these matters before today. We made a number of proposals to them and we can support a number of the Home Secretary's proposals today.
	On issues of security, I agree with the Home Secretary that the national interest is best served when we can proceed on the basis of consensus, so it isvery regrettable that during the consultation process the incoming Prime Minister pre-emptively made announcements through the media about matters that should be above party politics. On our side, we will continue to try to achieve consensus where possible.
	We can support, in principle, several of the current proposals. First, we can support the proposals on sentencing, subject to proper judicial process. Secondly, I see no objection in principle to a number of the other measures, including one that the Home Secretary did not mention today, but which was in today's press, and has been called the "terrorist offender register"—the travel notification arrangements.
	I have to tell the House that there have been serious failures in the equivalent operation of both the sex offenders register and the control order regimes, to which the Home Secretary referred, with large numbers of escapes from control in both cases. We should remember that no legislation will work if the Government do not implement it properly—a key issue in this area.
	Thirdly, we strongly welcome the intervention to lift the ban on post-charge interview of terrorist suspects. We first proposed that two years ago.
	Fourthly, we have been calling for some time for the Government to lift the ban on using intercept evidence in terrorism cases. The Leader of the Opposition recommended to the Prime Minister that a Privy Council Committee should come up with a proposal for the use of intercept evidence, although the Home Secretary referred to it in slightly different terms.For that to work, the Committee has to produce its recommendations in time for the Government to incorporate them in the terrorism Bill in November, so I urge the Home Secretary to make those last two measures his first priority. They would have the greatest impact, by enhancing our ability to prosecute terrorists, which is at the end of the day the only sure way to protect the public.
	When the Government previously tried to insist that 90-day detention without trial was essential to the security of the nation, the House did not believe them, and rejected the idea. Since then, the evidence is that the House of Commons was right. We are told, for example, that the 28-day limit did not handicap the complex investigation into the alleged Heathrow terror plot last August, which is presumably why the Minister for Policing, Security and Community Safety told the shadow Attorney-General yesterday that there wasno pressure from the police for an increase beyond28 days. Many counter-terrorism experts fear the reverse: that such a move will cause resentment in the Muslim community and damage our ability to gather intelligence—the critical weapon in our battle against terrorism.
	At 28 days' detention, we are already the most draconian of the common law democracies. America, with all its sensitivities on the subject, allows only10 days' detention before indictment. In December, the Attorney-General and the Lord Chancellor said that there was no evidence for extending the 28-day limit. Will the Home Secretary tell the House what has changed since then?
	I have set out several proposals that we can support. Our priority must be to prosecute and convict terrorists—nothing less. That is the only way in which a liberal democracy can ensure that terrorists remain locked up until they no longer pose a threat to public safety. It does not require the House to undermine the ancient rights that millions died defending. We do not defend our way of life by sacrificing our way of life; we cannot protect our liberties by sacrificing our liberties.

John Reid: I thank the right hon. Gentleman for his support for a number of the proposals and for his general approach and the manner in which we have been able to conduct our discussions, which augurs well. I extend those comments to the hon. Member for Sheffield, Hallam (Mr. Clegg). I will not deal with all the points the right hon. Gentleman raised, but I will deal with two big ones.
	On intercept, I can confirm that the idea of looking at the matter in Privy Council terms arose from a suggestion made by the Leader of the Opposition in discussions with the Prime Minister. I was happy to accept that and I announced today that, in principle, we will do that. I am also aware, as the right hon. Gentleman will be, that the Leader of the Opposition has written to the Prime Minister in the past 24 hours to carry forward those discussions. The sooner that can take a concrete form, through the usual channels, the better. We can leave that to them, but we have the basis for proceeding and seeing whether we can examine the matter again. In the last instance, Governments cannot abrogate the responsibility to make decisions when they believe that that is in the national interest. That is why I used the words "wherever possible". But I also believe that there is an obligation on us to try to find some way of resolving apparent impasses.
	Let me deal with the issue of 28 days. The right hon. Gentleman raised two questions: the first was about what has happened in the past year and the state of the evidence, and the second was about the view of the police. On the evidence, I have said that I do not think that there is an open-and-shut case for going beyond28 days. I do not believe that we are talking about something that is self-evident. However, the experience in the course of the last year—particularly in relation to the events of last August and the charges that followed—suggests that the evidence for going beyond 28 days has strengthened. For instance, in one or perhaps even two cases, charges were laid at the 28-day limit. Combined with the statement from the police that they can envisage circumstances in which it might be necessary to go beyond 28 days, that means that we ought to reconsider that possibility—I have not said how far beyond 28 days we should go.
	On the police view, the police have not put pressure on us in the sense of saying, "This must be done, or there will be a crisis." However, it would be untrue to infer that they have not asked me to consider the matter and to raise that consideration inside and outside Government, because they have. They have said two things: first, they can envisage circumstances in which they might have to go beyond 28 days and, secondly, that they would like me to raise the matter for discussion again, which is precisely what I am doing. I hope that that is a balanced way of presenting the issue. I personally believe, as do the Prime Minister andthe Chancellor—the next Prime Minister—that it is necessary to go beyond 28 days. However, we accept that others have reservations and we therefore want to see whether we can achieve any consensus on the matter.
	Finally, it is one thing to say that we should prosecute and convict. That is our earnest desire and our key priority. It is what our whole legal system is geared towards. We all agree on that, but that is not the question. The unavoidable question that confronts us all is: what should we do when there is sufficient information to suggest that there might be the possibility of murder on a massive scale through anact of terrorism, but the evidence does not reachthe threshold required to allow us to bring charges? Whatever we do on intercept or post-charge questioning, it will not be a magic solution. We will still face the question of what we, as a responsible Government, should do if there is sufficient information to convince us that there is a chance that there will be murderous mass slaughter in a terrorist attack, but we cannot get the level of evidence that would enable us to bring a charge within 28 days. That question will not go away, whatever we do on the other issues.

John Reid: I thank the right hon. Gentleman for his comments. I have found him enormously helpful as a constructive critic of the Government's approach to these matters, as well as of specific measures. We regard the Home Affairs Committee as an essential element of the process.
	I will try to make sure that we give a balanced view—including the view of the police—of where we think the case has strengthened, or indeed moved in the other direction, in relation to going beyond 28 days. I would merely point out that I have not mentioned any figure today. I have not referred to 50 days or 90 days. I have said that I can envisage the need to go beyond28 days, but that was said in the spirit of opening a discussion.
	I want to make it absolutely plain that discussionon the stop-and-question powers is going on inside Government. I did not raise the matter, and neither did the police in mainland Britain. It derived from one source. However, it is also evident that at least one source has major misgivings about it. The problem is that the source is the same in both cases.  [ Laughter. ] We will carry on with the consultation on these matters.

Nicholas Clegg: I warmly thank the Home Secretary for his statement and the cross-party spirit in which it was delivered. If his successor and the incoming Prime Minister are able to maintain that approach, and if we are all able to ensure the right balance between the defence of our customary British liberties and the new security measures, we as an Opposition party will seek to play a full and constructive role in the process. Will he confirm that there is scope for us to introduce other proposals and ideas that are not in his statement? For instance, we could explore the use of plea-bargaining procedures to encourage informants on the periphery of terror plots to provide more information, and we could look at the threshold test used by the Crown Prosecution Service when bringing charges in terror cases. Will he confirm that we will be able to introduce such things over the next few months in time for the debate on the Bill in the autumn?
	The Home Secretary has said that control ordersare full of holes. Will he confirm that far from just operational tinkering of the existing control order regime, there will be scope for its wholesale review? Does he agree that if we are able to build on the apparent cross-party view that there is a real case for expanding the possibility of questioning post charge, it will significantly diminish the case of those who believe that we need once again to reopen the vexatious and time-consuming debate on the period of detention without charge that can take place?

John Reid: The Chancellor is indeed an old and close friend. We have discussed such issues over many years—in recent months, we have discussed them in some detail. Let me be absolutely straight about last Sunday's reports. First, most of the issues that were cited not only were raised during a question and answer session with the Chancellor on Sunday, but had already figured in speeches made by him, me and the Prime Minister over a period of months. They arose out of our discussions.
	Secondly, the points were made not before we had consulted others, including the right hon. and learned Gentleman's party's leader and spokesman, but after that. In fact, everything that appeared in last weekend's press had previously been given to the Memberswho speak for the Opposition parties. Thirdly, it is absolutely appropriate that the person who will inherit the premiership of this country in the next few weeks, all things being equal, should be fully engaged in the biggest issue facing the country: national security and counter-terrorism. I discussed the matter with the Chancellor before and after last Sunday and I will continue to do so.

Karen Buck: The overwhelming majority of the substantial and very diverse Muslim communities in my constituency are united in abhorring terrorism. Indeed, many members of those communities are here precisely because they fled terrorist regimes. Does my right hon. Friend agree that it is hard to overstate the extent of anxiety among those communities about the way in which they often feel targeted by anti-terrorist measures, and does he agree that the extremist minority is very good at exploiting those fears? I assure himthat if we proceeded with stops-and-question powers without ensuring that we deal with the moderate majority, and without explaining and encouraging understanding of the measures, that anxiety will be intensified.
	Consensus in the House is not the same as consensus in the community. It is not good enough to expect the Muslim communities to participate in the discussion. What steps will my right hon. Friend take to reach out into those communities, particularly to young Muslims, to ensure that they take advantage of the measured and lengthier approach to developing the next stage of legislation and that we can bring them on board so that they understand what we are doing and why?

John Reid: I think that I agree with every point that my hon. Friend raises. I merely point out at this stage that we will not put forward for consultation the stop-and-question powers to which she referred because we have not finally resolved that inside Government. Perhaps it gives her a degree of reassurance that that will take place before any consultation outside. I that hope everyone will get involved in the consultation outside, including through their representatives in the House. There are hundreds of people in the House who represent every section of British society, and I hope that they will continue to make their views known, as my hon. Friend has done.

John Reid: I agree with some of the hon. Gentleman's comments. I have long said that control orders are not even my second-best option. In many cases deportation would be the second-best option. Next to that, detention would be. Beyond that, full control orders and surveillance might be, so we get to the fourth option, which sometimes feels like trying to keep soup in a sieve. Then, ironically, people who are sometimes those who have most bitterly opposed the strengthening of my powers, point out how inadequate they are for controlling terrorist suspects. I agreewith that.
	However, the conclusion that we would need to derogate from or abandon the principles enshrined in the European convention on human rights is not a right conclusion. We certainly need to appeal against one judgment in particular—the Chahal judgment, with which the hon. Gentleman will be very familiar—which was made by the European Court before we had a Human Rights Act in this country, and even before we had a Labour Government. I believe that that decision is very wrong, and we are appealing and doing everything we can to reverse it. We are appealing on the back of one case, and considering appealing on the back of a second case.
	There is a growing awareness throughout Europe that that decision and its implications are extremely serious, and that we need to try to ensure that we strengthen our European convention to take account of today's threat—the intention and capability that was not envisaged when we brought in the European convention from the circumstances of the mid-20th century. There are now individuals who have the potential capability of wreaking misery and death on a massive scale that 60 years ago was within the grasp of only a sovereign state. There are now individuals and networks of individuals who are capable of doing that, and we need to ensure that our powers are strong enough to encompass that challenge as well.

James Clappison: On another aspect of deportation, is the Home Secretary aware that in a number of terrorist cases resulting in convictions there appears to have been a connection between the commission of terrorist offences and the influence of extremist preachers and extremist figures? In August 2005, just after the London bombings, the Prime Minister announced that the Government would immediately establish new grounds for the deportation of people involved in fostering violence in that way. In a written answer to me at the end of March this year, I was told by the Government that there had been only one such deportation for fomenting acts of terrorism.I understand that there may have been one sincethen, but will the Home Secretary reconsider a more vigorous approach which does justice to the scale of the problem of the extremist preachers and their wretched influence?

Stewart Hosie: I agree that terrorism poses an unprecedented threat and is continually evolving. I welcome the Home Secretary's approach to strengthening the counter-terrorism capability, while putting in place corresponding parliamentary and other scrutiny as a bulwark against arbitrary misuse of powers. I welcome also his intention to proceed on the basis of consensus, and his statement that in advance of a new Bill there would be a content paper, the sharing of clauses and early engagement with the Select Committee on Home Affairs and the Joint Committee on Human Rights. Will he undertake early communication with the Minister for Justice in Scotland, who I know shares our concerns on these matters? There are some issues in today's statement that we will need to consider more fully, such as the use of DNA, but we welcome things such as post-charge questioning with the correct legal protections. We would welcome the use of intercept evidence, but I understand the Home Secretary's caution and support the Privy Council approach.
	Might not pre-charge detention post-28 days stillrun counter to the right not to undergo arbitrary detention? Is it not still the case that evidence gathered after 28 days may not be admissible in a court of law? If he has not already done so, will the Home Secretary commit to having a legal opinion prepared by the Government's Law Officers and published, so that all of us in the House can see the legal position in respect of post-28 day pre-charge detention?

Julie Kirkbride: Hasthe Home Secretary examined the French system of disruptive arrest without charge, and can he tell us whether it is likely to form any part of the proposals to be put before the House in the forthcoming Bill?

John Reid: No, I am not convinced that this canbe done without the disadvantages outweighingthe advantages. I am in the opposite camp, as I am persuaded—certainly at present—that the disadvantages would outweigh the advantages. I agree with the intelligence and security services in that case. However, it is obvious that others, including the hon. Gentleman's own spokesman and party leader, take a different view. We think that the best way to deal with this, at the suggestion of the hon. Gentleman's party leader, is to have some independent assessment based on Privy Council terms. My personal view at the moment is exactly as the hon. Gentleman outlined. We ought to be very careful to ensure that we do not win the minutes in a few of these cases but by following those methods lose the hours in the fight against terrorism.

John Reid: Yes, indeed, the hon. Gentleman may.In anticipation of his remarks, I have decided to do precisely that.

John Healey: As I shall explain more fully later, the Bill is not a policy measure designed to deal with a problem located only in the south-east. What my hon. Friend says is true, but this is a specific Bill with a specific purpose.
	I know that my hon. Friend has taken an interestin a much wider review that the Government are conducting on reinforcing the capacity of areas to lead and encourage more redevelopment and regeneration. I welcome the contributions that she has already made from a Stoke-on-Trent perspective, and I look forward to hearing her speech.

John Healey: As the hon. Gentleman probably realises, the answer to his question is problematic. We can never be certain about the intent of landowners and their possible reasons for keeping property vacant. What we do know—because they have been published by the Department for Communities and Local Government—are the vacancy rates of properties that are eligible for empty property relief, which show some striking patterns.
	In Birmingham, where I do not think anyone would argue that demand for property is particularly low, a fifth of rateable value property is not just empty but the subject of claims for empty property relief. In the City of London, the proportion is 16 per cent. The existence of such oddities in the system underlines the argument for reform and a more sensible and efficient regime. That was certainly Kate Barker's conclusion in her analysis of land use in England. She outlined the beneficial effects of reform of the rating of empty property, stating, for instance:
	"development is encouraged on sites which have already been developed, which reduces the need to build on greenfield sites and improves environmental outcomes."
	In accepting Kate Barker's recommendation for reform, the Government also asked Sir Michael Lyons to consider the case for change from the point of view of local authorities and local authority financing. The nature of the representations that he received from local authorities across the country, which are aware of the local impact of the current empty property relief regime, was very revealing. A number of authorities expressed the strong opinion that it should be reformed. Hampshire county council, in the constituency of the hon. Member for Fareham (Mr. Hoban), said simply "Yes" to the proposal for reform. It therefore came as no surprise when Sir Michael—agreeing with Kate Barker—concluded:
	"Analysis shows that vacant property is found in areas of high demand as well as in areas of low demand and former industrial areas.
	Finding ways to raise the opportunity cost of holding unused land and property in areas of high demand at such a time would be desirable. Reforming the empty property relief would help to provide this, and thus assist local authorities in their place-shaping role."
	The Chancellor accepted those recommendations in the Budget, and the Bill legislates for the reform.
	The Bill, although short, has four principal elements. First, it will increase the empty property rate from50 per cent. to 100 per cent. of the occupied business rate for all properties. At present empty industrial property is, through regulations, exempted from the50 per cent. rate. In the light of evidence in Kate Barker's analysis that holding one type of property involves no difference in risk, those regulations will be amended to equalise the tax treatment of all empty property—albeit with six months relief of industrial property rather than the current three months, which will remain for empty retail and offices premises. We believe that that will give owners a strong incentiveto re-let, redevelop or sell on empty non-domestic buildings, thus reducing the need for new development on greenfield sites and increasing access to existing premises for businesses, which will help to reduce rents overall.
	Secondly, the Bill provides for a zero rate on empty properties owned by charities—as announced by the Chancellor—and those owned by community amateur sports clubs. Many such bodies play an important role in regeneration and heritage projects in all our constituencies, and the Bill will give a significant boost to the Government's support for the activities and commitments of the third sector and community sports clubs. Thirdly, the Bill provides a power to return the empty property rate from the new level of 100 per cent. of the basic occupied rate to a minimum of 50 per cent. of that rate. It is a reserve power, which will ensure that in future any Government will have flexibility to respond to changing or prevailing conditions in the property market. Fourthly, the Bill provides a power to tackle rate avoidance tactics by disregarding changes to the state of property in circumstances to be defined in regulations. For example, if an owner removed the roof of a property for rating purposes, it could be valued as though the roof had not been removed.
	Property development and investment are keyparts of the United Kingdom's economy and the Government are well aware of the role that they play in its present and future success. I therefore want to ensure that we respond to the main issues raised by industry bodies. Since the Budget, we have had received useful representations from professional bodies. In general, they have welcomed the Bill's intention, and although they have raised concerns about its likely effects I am confident that we can deal with them.

John Healey: That is indeed something we have looked at—it was a concern that was expressed to me and on which we have already begun to act. From April this year—we are not waiting for the Bill's reforms to come in next year—we introduced a business premises renovation allowance, which may be of interest to my hon. Friend. He may have missed my saying earlier that we are consulting on future tax incentives that can help the redevelopment of brownfield land.
	May I correct one common concern, namely, that the Bill has something to do with the business rate as a tax? Empty property in the UK has been rated in the UK for tax for well over 40 years. As Michael Lyons made clear, business rates are a tax on property capable of occupation. The Government are not intending to bring new property into the rating system; rather, we are looking at the level and duration of the reliefs that are offered to property when it becomes empty.
	In the past, a minority of firms decided that deliberate dereliction was preferable to paying empty property rates. The Secretary of State for Communities and Local Government will be publishing next month a consultation on the secondary legislative provisionsin this Bill, in which the Government will ask for industry's comments and those of wider groups on a package of potential anti-avoidance measures to deal with such risks. However, I want to be clear that it is not the Government's intention to penalise legitimate development activities that lead to properties being removed from the rating list. On regeneration, it is true—as my hon. Friend the Member for Edmonton (Mr. Love) said—that the Bill has been criticised as a barrier to regeneration and redevelopment. The principal flaw with this argument is that those who make it have looked at the Bill, but not beyond it to the parallel reforms to the system.
	A list was published by the DCLG of the top10 local authorities where property is sitting empty.With the exception of three—Hyndburn, Sandwell and Wolverhampton—the other seven with the highest level of vacancy rates claiming empty property relief are in London, the Thames Valley and the city centres of Manchester and Birmingham. Those are not areas where the demand for land is weak or where there is an excess or supply. All, of course, are areas with high property values, hence the £60 million of empty property relief costs to property in the City.
	For areas where demand is low—for example, wards across Hyndburn, Sandwell and Wolverhampton, as well as for wards across all of the assisted areas in the country—we have introduced a new 100 per cent. capital allowance for the renovation of empty commercial property from April this year. The business premises renovation allowance is available now, a year in advance of the reforms proposed by the Bill.
	We are ready to go further. I have mentioned the consultation on the future of tax incentives for the redevelopment of brownfield land, which proposes an extension of the 150 per cent. allowance providedfor the remediation of contaminated sites to cover long-term derelict land and property, as well as biological problems such as Japanese Knotweed.

Michael Gove: It is always a pleasure to speak in a debate opened by the Financial Secretary to the Treasury. He makes his case with fluency and care and today he has once again underlined his reputation as an asset to the Treasury. It needs every asset it can get. His presence here underlines another fact; the Bill is a straightforward exercise in raising revenue. Despite all the claims made for the Bill as a supply-side reform of the property market, it is nothing of the kind. Despite the eloquence of the Financial Secretary and, indeed, the presence of the Minister for Local Government, the hon. Member for Oldham, East and Saddleworth (Mr. Woolas), we know what this Bill constitutes; it is a straightforward tax demand.
	If we look at the Bill as an application to reform the way in which we use land, it simply does not convince. Planning applications need to pass certain robust tests and this Bill fails the tests that any application to change the use of land would have to pass. The measure has been flimsily constructed, buckles under pressure and will not enhance the built environment.
	Let us examine how flimsily constructed it is. The basic premise of the Bill is that owners are deliberately keeping property empty and need to be taxed into putting it to good use. When we first debated the issue, I asked what justification there was for the idea that individuals were deliberately forgoing the chance to maximise their income and the return on the capital they had invested. Who were these remarkable individuals or odd companies who wanted to earn less than they could every year? What evidence was there for widespread economic masochism on the part of the commercial property sector? Despite the best efforts of the Minister for Local Government, no evidence was produced at the time. Despite the best efforts of the Financial Secretary, no evidence has been produced of the wilful keeping empty of property that could otherwise be filled.
	The Minister could not offer us any evidence because there is no robust evidence that landlords are wilfully depressing their balance sheets and turning away eager tenants simply out of perversity or idleness. If the Minister had taken the time to read  Propert y Week at any point over the last two weeks, he would have seen how that magazine's readers have been up in arms at this proposal. They have underlined how unjustified the assumptions behind the legislation are. As one correspondent said:
	"Would Phil Woolas buy a car for £50,000 or £100,000 and never use it, leaving it in the garage? Why do people invest in property; to board it up and leave it empty? No—to obtain a return on their investment."
	Let me make it instantly clear that we know that the Minister for Local Government is a frugal guy and that he would never spend anything like that amount of money on a flash motor.  [Interruption.] He would if he could, but he will have to wait until he is Deputy Prime Minister before he can spend those sorts of sums on cars. The reason why he would not leave that car rusting in his garage is the same reason why individuals who happen to be property owners want to find tenants. They want to get their capital working for them. It is to misunderstand the commercial property market completely to believe that some individuals who would otherwise fill their property with tenants are sitting back and drawing this relief rather than getting their capital to work for them.
	In considering the tax justifications for the measure, it is also important to appreciate that it changes how business rates are levied. The Financial Secretary dealt with that to an extent, but it is important that we return to the core principles of taxation. We discussed them during the first debate on this measure—that on the Ways and Means resolution. Business rates are, like all business taxation, understood by business to be a levy on commercial activity. Unless there is activity, it is hard to justify a charge on the balance sheet. How can we tax no commercial activity?
	We also need to understand that rates are a charge on the occupants of a building for the use of local services. The principle behind both domestic rates—the council tax—and business rates is that the occupants of a building are asked to pay for the services that they use. However, that principle is upended in this proposed legislation. There will be buildings that are unoccupied so there is no occupant to tax, and, because they are empty, they will not require the same level of local services as they would if they were fully operational and occupied, and yet their owners will be asked to pay for services that they do not use. That is an unfair and unjustified additional levy on business, and it upsets the delicate principle on which business rate taxation has rested.
	Another basic principle is threatened by this proposed legislation: the principle of the retail price index cap on the business rate. We also discussed that when we debated the Ways and Means resolution; however, although the Minister made his best attempt to address the matter, I felt that it was unsatisfactory. Sir Michael Lyons has been prayed in aid as the godfather of this measure, but in terms of the reform of business rates he was very clear that any change to the relief that people enjoyed on empty properties should be granted only after extensive consultation and as part of a broad rebalancing of the business rate system. He did not argue for the introduction of this change in isolation, which is what the proposed legislation will do. Sir Michael explicitly said thatany change should occur in 2010 after extensive consultation. It will not have escaped the House's attention that this legislation is being introduced three years earlier and after merely weeks of consultation. This is not considered legislation intended to rebalance business rates; it is a rush to plunder.
	On the RPI cap, the principle that businesses understand in terms of the business rate is that there will be revaluations from time to time and when that happens the rateable value of some properties—such as those that have been suitably enhanced or those in areas of high demand where property values have increased—will increase. However, they also appreciate that if that happens, the multiplier—the amount they will have to pay in consequence to keep their business rate at an appropriate level—will increase only in line with inflation in the rest of the economy. The principle behind that is that business should not be used as a milch cow to subsidise other parts of the local government taxation system or of the taxation system in general. Instead, it should pay its way in accordance with inflation.
	This taxation change will lead to business paying an extra £1 billion a year direct to the Exchequer through the business rate system. The basic principle behind the RPI cap will be busted. Business will be paying more than any increase in inflation would merit. The RPI cap can be maintained only if somewhere else there is a compensatory relief or reduction in the amount that businesses pay in the rating system. I would be interested to hear the Minister's explanation of how we can possibly raise an extra £1 billion from business through the rating system and also maintain the RPI cap; if he can square that circle, I will be fascinated to learn how.

Bob Neill: Is not the concern felt by many in the commercial sector, particularly those involved in small businesses, reinforced by the remarkable fact that thisis the only element of the Lyons review that the Government have made great haste to introduce into legislation? Every other matter is kicked back so that there is more consultation, but the one element from Lyons that is immediately seized upon is the element that happens potentially to increase the burden on business. That gives us concerns about the Government's motivation.

Michael Gove: I am grateful to the Ministerfor telling us about the FSB. I will not at presentgo into the details of the case made by its headof parliamentary affairs, Mr. Stephen Alambritis. However, I will move on to the broader impact that the measure will have on businesses large and small across the country. One lobby group led by one individual has made the case in favour of the Government's measure, but many other groups, which cover not only the commercial property sector but also the important areas of regeneration and retail are deeply upset about what is happening. They include the British Property Federation, the British Retail Consortium and the Royal Charter—I mean the Royal Institution of Chartered Surveyors. How on earth I forgot the name of that body when it has been so helpful to me in the past I will never understand—it is a fantastic body. The point stands: we can trade trade bodies at the Dispatch Box for some time, but the balance rests with the Opposition and those who are concerned about the measure. If we are simply going to weigh the number of representations that have been made, the measure will fall, as the total representations critical of the measure far exceed the total representations from the commercial sector that support it.

Philip Dunne: I am grateful to my hon. Friend for allowing me to pick up the allegation by the Minister that the Federation of Small Businesses is uniquely in favour of the measure. If the Minister took the trouble to read the federation's remarks in full, he would see that it is in favour of the way in which the measure attacks large business. When it comes to the small businesses that it represents, it says:
	"However, the FSB is keen to ensure that small businesseswho are unable to use or sell empty property for legitimate commercial reasons are not punished by the new rules. There should be exemptions in such cases."
	In other words, it thinks that the measure should apply to everyone other than its members.

Michael Gove: I am grateful to my hon. Friend for pointing out the true way in which we should look at the FSB's case, and the fact that it is capable of more than one interpretation. The devil can quote scripture for his own purposes, and Labour Ministers canalways pray in aid submissions from small business organisations at any time they choose. The truth is that the measure will not encourage the more efficient use of land, and it will not promote regeneration: it will actively work against both.
	If we look at regeneration projects overall that benefit businesses large and small, as well as the residents of areas that are run down and require investment, we can see that when people attempt to put such a project together, it is sometimes difficult to get all the parcels of land in one place before they can press the button, get the green light and go ahead with a significant regeneration project in, for example, Stoke-on-Trent. It is sometimes difficult to align all the investors that one needs for a project until different parcels of land have been brought together and investors are satisfied. By their very nature, such projects operate on the margins of viability and profitability for some investors—they are high-risk options. For many investors considering whether to press ahead with regeneration schemes, the existence of the relief is vital in making viable schemes that would not otherwise be so. The removal of the relief will imperil future regeneration projects, and a number of regeneration practitioners, developers and others have made crystal clear in the pages of  Property Weekly, the  Estates Gazette and other publications the direct threat to future regeneration, particularly in the most vulnerable areas of the country, posed by the measure. I should therefore like to ask the Minister, when we reconsider the measure in due course, whether he would contemplate amending it to ensure that the areas of greatest vulnerability or areas where regeneration is most needed can enjoy a measure of relief that is not extended to other areas. Is there any opportunity to achieve cross-party consensus to ensure that regeneration in vulnerable areas is not affected by the measure?
	Another of the Government's justifications for the measure is that it will help the small businesses to which the Minister referred by compelling property owners to let properties that they are perversely keeping empty. The belief is that because property owners will lose the relief, they will be compelled to lower rents to fill their properties: that is the case that the Minister has made for the measure. The truth, however, is that smaller businesses will find that owners have to take steps to safeguard their properties against the risk of companies that take leases failing, and those properties being left empty. Those businesses will therefore be liable for additional rates without commercial activity taking place on those premises. A case that has been put to me and, I am sure, to Ministers by people with a direct interest in the commercial sector is that the system of leasing commercial property will become more rigid and onerous for smaller companies. Landowners who are concerned about the additional risk of sites falling empty, will frame their leases in such a way as to make them significantly more rigid and more difficult for smaller companies to accede to. I accept that the Minister said that the Government have consulted and want to make life easier for people who want to take on commercial leases. All that good work, however, could be undermined by large property companies wishing to insulate themselves from risk and framing leases that work against flexibility and act as a barrier to entry for precisely the small shops that, I suspect, both of us want to occupy a healthy high street.
	Another justification for the measure concerns the overall economic benefit that it is supposed to bring by encouraging the more efficient use of resources and increasing the amount of commercial property and commercial activity. However, as was pointed out by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), the measure has another economic effect that could be profoundly deleterious, as it impacts on pension funds. Pension funds, as we all know, hold significant property assets—a point acknowledged by the Financial Secretary. If he is right, and the measure leads to the lowering of rents, thatwill mean that the capital value of those property assets will decline and the yields from those properties will decline. That means —[ Interruption. ] It is the Financial Secretary's argument, and I am merely pointing out that if it is correct, it will have an unfortunate effect on pension funds. The Government made a tax change before when they were in a hurry to get revenue for a pet project. They were warned by pension funds and investors in those funds that the tax change would have a deleterious effect. They pressed ahead regardless, and the effect on pension funds was significantly greater than even the most profound pessimists had imagined. There is therefore a serious risk that the value of pension fund assets will be adversely affected by the changes. It is clear that those involved in the commercial property sector fear that as a result of future projects becoming unviable, of costs increasing and of the greater rigidity of leases, the value of their assets will be lowered. That will have a direct effect on every saver in this country.

Michael Gove: The hon. Gentleman uses two completely separate parts of the argument; however, both emphasise the point that this provision is a tax increase. I should be interested to hear in the Minister's summing up examples of tax increases that are good for business. This tax increase will be an additional hit on business and busts the RPI rule, and it will also have an effect on the commercial property sector. Those who hold shares in commercial property will, like our pension funds, suffer. As I said, I should be interested to hear of any example that the Minister can give of tax increases that work in the interests of beneficial commercial activity, because they very rarely do so. As we explained earlier, the principal justification for this measure is simply the raising of £1 billion.
	There are a number of different ways in which this measure will make life more difficult for businesses. We have outlined how it will make life more difficult regarding leases and the adverse effect on pension funds, but the manner of this change's introduction could also lead to an increase in the number of companies contesting valuations, more tribunals, more bureaucracy and additional cost. So as we can see, the original foundations of the Government's case are flimsy. The basis on which they are introducing this measure does not stand up. The costs for business are clear. Crucially, this change will also work against the improvement of the built environment.
	The Government now explicitly acknowledge in the Bill that there is a real risk that some people will vandalise their own property in order to escape liability for tax. During the paving debate on the Ways and Means motion, the Minister for Local Government said that it was debatable whether people would rip roofs off buildings and strip out floors in order to evade tax. However, what was debatable then has become a real danger that the Government nowfeel that they need to legislate to prevent. Indeed, schedule 1(4) is specifically intended to deal with that risk. That legislative change acknowledges the force of our argument that this legislation could lead to all sorts of perverse incentives and temptations in the operation of the commercial property market.
	More than that, the measure itself raises all sorts of questions. How will intent be proved? What exceptions will arise? We will have to wait for the answers until secondary legislation is introduced, but the Minister risks putting himself in the position of having to judge the intention of an individual when they change the use of their property, and all because of the creation of a perverse incentive.
	The truth, which the Minister has failed to acknowledge, is that the real reason why properties lie vacant for longer than they need to is not the existence of this rate relief but our dysfunctional planning system. The operation of the use class system and the making of a change of use so difficult prevent the property market from responding as rationally as it should to demand. In the previous debate to which I referred, several of my hon. Friends—my hon. Friends the Members for Salisbury (Robert Key) and for St. Albans (Anne Main) chief among them—pointed that out eloquently. The planning rules needed to be changed, so that the use of certain properties in their constituencies could be changed and they could move from a function that was no longer required to a new one that was very much wanted. However, because of obstacles and delays in the planning system, those properties were compelled to lie empty for too long.
	Under this measure, individuals who are desperate to see an active and effective new commercial use for their property will pay additional taxation even as they strive to do the right thing commercially, but are prevented from doing so by the planning system. Our built environment thus suffers, because buildings are not used as they should be. They are not used as effectively and efficiently as they should be to satisfy local demand, to meet local market needs and to ensure a proper return on the investments made.

Michael Gove: My hon. Friend crystallises the point that was made equally eloquently in the debate of just a few weeks ago by my hon. Friends the Members forSt. Albans and for Salisbury. The way in which the use class system currently operates prevents properties from being deployed in the most efficient way. The problem is not just the use class system, however; other aspects of the planning system's operation prevent properties currently lying empty, because their old use is no longer appropriate, from being redeployed for a more appropriate commercial or other use.
	When the real answer to a problem is deregulation, it is typical of this Government to propose a tax increase. It is a particular pity that the eloquence and intelligence of these two Ministers has been deployed in the service of making life more difficult for businesses, when their hearts surely cannot be in this measure. It is genuinely sad for us to have to contemplate these two Ministers bringing forward a measure that will mean that, once again, the wealth creators, the enterprising and the bringers of opportunity are forced to pay for the Chancellor's inability to balance the books, but there we have it.

Joan Walley: I do not wish to let the opportunity pass of having a Treasury Minister and a Local Government Minister side by side on the Front Bench without flagging up some issues of regeneration. This is a short Bill, but it connects with many other areas of Government policy, including planning—as we heard from the hon. Member for Surrey Heath (Michael Gove)—and many other initiatives. It is important to put on the record some of the issues that I wish to be considered in some detail in the reviews that will flow from this Bill and the proposals in the 2007 Budget, and in respect of the joined-up Government agenda on the changes in how No. 10 and No. 11 will operate. It is critical that we consider regeneration and how this Bill will help that.
	In general, I welcome the Bill, especially the provisions on unoccupied properties owned by charities and community amateur sports groups. They will make a real difference and will be welcomed.
	The origins of the Bill lie in the Barker report on housing and land use planning, and in Sir Michael Lyons's review of local government. I have grave reservations about the implications of the Bill for areas of hard-to-let properties, such as those in Stoke-on-Trent. It is a good thing that we are encouraging developers not to let buildings stay idle. Developers can stand by waiting for the right time for speculative developments and that is all well and good in the south-east. When Kate Barker came before the Environmental Audit Committee, much of the thrust of her recommendations related to the particular problems of lack of affordable property and the overheating of the economy in the south-east. In the Committee's report on that inquiry, we consideredthe Egan report on the predict-and-provide approach in the south-east. The Minister mentioned the Lyons report, and Michael Lyons has confirmed that it was about hard-to-let areas and the rest of the country. He also said:
	"Finding ways to raise the opportunity cost of holding unused land and property in areas of high demand would be desirable."
	The Bill is about areas of high demand, and the danger is that we end up with a one-size-fits-all approach that will not have the same relevance for places such as Stoke-on-Trent. I do not want a Billon empty properties that has no relevance to my constituency. We already have a fragile economy in the area, but we also have strong regeneration strategiesin place. They should not be weakened by a blanket proposal to end all relief on empty commercial properties.
	The hon. Member for Surrey Heath mentioned further reviews and flexibilities. I hope that Ministers will look at how areas of low demand that need regeneration can benefit from the regulations and statutory instruments that will be introduced as a result of the Bill. That secondary legislation should be used to increase the flexibility in areas such as Stoke-on-Trent.
	The Government are concerned about the economic performance of areas such as mine, and I hope that Stoke-on-Trent's record in that respect will be included in the terms of reference for the commission that my hon. Friend the Minister for Local Government is about to set up. We urgently need a joined-up approach to regeneration.
	Earlier, my hon. Friend the Financial Secretary mentioned the private discussions that we have had on this matter. I hope that the forthcoming comprehensive spending review will be used to continue the £1.5 billion already available through the neighbourhood renewal fund—

Joan Walley: I know that my hon. Friend the Minister said that there would be more money only from a sedentary position and not formally through you, Mr. Deputy Speaker, but the neighbourhood renewal fund is used for areas with the greatest deprivation and it is part and parcel of the economic regeneration needed there. The Bill will have implications for those areas, and that is why I hope that Ministers will ensure that the matter is followed through in the context of the CSR. Other local authorities in the SIGOMA organisation take thesame view.
	There are between 1,500 and 1,600 empty properties in Stoke-on-Trent. It is estimated that the Treasury has lost just under £7 million from loss of rates, and it is clear that it is in all our interests to get those buildings back into use and re-let. That can only happen if a joined-up economic regeneration strategy is linked to the local authority agenda. For that, the money from the CSR must be used in conjunction with the further consultation process already under way as a resultof the 2007 Budget, but we must make sure that Department of Trade and Industry policies such as that embodied by Advantage West Midlands contribute to the regeneration that we need.
	The Bill must be set in that wider framework. Unless there is a mechanism to ensure that joined-up operations in areas such as Stoke-on-Trent are followed through in the strategies adopted by the Treasury, the DTI and the Department for Communities and Local Government, we will end up with a Bill that benefits the south-east and areas of high demand but does very little for areas of low demand.
	Finally, I hope that my hon. Friend the Minister for Local Government, when he replies to the debate, will say something about the talks that he is having with English Heritage, as the flexibilities that have been mentioned will have great significance for listed buildings. Such buildings are often empty for all sorts of very good reasons, and they can need a great deal of help.
	I look forward to the response that my hon. Friend the Minister for Local Government will make to the debate.

Danny Alexander: It is a great pleasure to follow the hon. Member for Stoke-on-Trent, North (Joan Walley). I am not on my usual territory with this debate, but at least the Financial Secretary is a familiar sparring partner.
	I listened with great interest to the hon. Member for Surrey Heath (Michael Gove), who spoke with his customary eloquence.
	The Bill raises some important issues, which the Financial Secretary, who is no longer in his place, set out carefully in the initial presentation. The hon. Member for Surrey Heath talked about the need for cross-party consensus, and there might at least be some small consensus in that none of us wants to see large numbers of empty properties. They cause problems for development, can blight the landscape and for a whole range of reasons are a bad thing. No doubt we will hear more about small shops and town centres from the Minister for Local Government—he referred to them briefly during an intervention—when he replies to the debate than we heard from the Financial Secretary.
	As a member of the all-party parliamentary group on small shops, I certainly share the many concerns about the fate of small shops, whether in towns, villages or even cities, such as Inverness, which I represent. Over recent years Inverness has seen a decline in the number of small shops and a gradual replacement of some previously existing retail premises in the older part of town perhaps with charity shops. They tend for a number of reasons, perhaps including the rating environment, to be the sort of tenants to whom landlords find it easier to let. To share those concerns does not necessarily mean to share the Minister's view that the Bill provides the right way forward to address the problems.
	I have a number of concerns and questions to raise, which I should like the Minister to answer. I am concerned about the process that the Government have gone through to reach the Bill. I am concerned about the genuine purpose of the measure and, most important about its impact. In opening the Financial Secretary presented a macroeconomic argument for the Bill, but it is in its microeconomic impact at local level that it will be judged. In that I share some of the concerns of the hon. Member for Stoke-on-Trent, North (Joan Walley) about the variability of the Bill's impact across the UK. Those serious worries are genuinely held in areas in need of regeneration.
	As a Member representing a Scottish constituency, I should point out that the Bill applies to England and Wales only. On one level, therefore, perhaps I should welcome it on the basis that it might promote more property development in Scotland, but I will not go down that route because these are serious matters that will affect the whole country one way or another, including Scotland.
	My biggest concern with the process has to do with the lack of consultation. The hon. Member for Bromley and Chislehurst (Robert Neill) pointed out that this was one of the few items from the Lyons report that had been implemented with alacrity. In his opening remarks the Financial Secretary listed a whole range of consultations that were either going onor about to start. We appear to have consultations galore, except on this proposal. While this measurewas proposed in one part of the Lyons review, paragraph 8.6 stated:
	"The Government should conduct a review of exemptions and reliefs to consider the scope for removing inappropriate subsidies and distortions".
	That is clearly a recommendation for a review, a discussion and consultation to seek evidence from the wide range of parties who have a strong interest in the matter. The Financial Secretary referred to a blizzard of reviews. Perhaps the Minister the Minister forLocal Government will confirm whether that specific recommendation of the Lyons review has been taken up.
	As other speakers have said—I do not wish to trade bodies with other hon. Members—there has been a lot of feedback and many different responses, which I am sure all hon. Members taking part in the debate have received. A range of contrary views has been expressed. We have heard about consultations on rate relief for brownfield developments. We have heard about consultation that is shortly to take place on the position of leaseholders—a matter to which I am sure other contributors to the debate will return. We have also heard about proposals for 100 per cent. relief for regeneration in assisted areas. That rather invites the question why, if we are having consultations on all those matters, the Government are rushing ahead with the Bill.
	We were previously treated to an exhibition of joined-up government. I am afraid that one element of that "joined-upness" has left the Chamber now. If the Government seek to have a joined-up, coherent approach to reform of the business rating system,why rush ahead with this one element when all the other elements are being consulted on? It suggests that the motivation behind the Bill is perhaps not as straightforward as the Minister would have usbelieve.
	The Government are trying to persuade the House to support the measure on the basis that they are thinking about all these other nice things. They hint that, when those consultations are completed, countervailing measures that will modify the impact of the Bill in areas such as Stoke-on-Trent will be introduced and we will see then an overall balanced package, which is not before us today. I am not sure that many outside the House will want to accept those assurances. They would like to see the whole package—the results of the consultation and the countervailing measures as well as the measure contained in the Bill—before deciding whether it is worth accepting. To do otherwise might be considered to be accepting a pig in a poke.

Danny Alexander: I understand the Government's argument that the Bill would lead to lower rents over time and to empty properties being filled more quickly, and thus more revenue from those occupied properties.
	As I was saying, the Liberal Democrat approach to environmental taxation is to propose additional taxes for environmental pollution and to return that money in a way that encourages good behaviour. However, the Bill would act as a stick from the Government—because they want to discourage bad behaviour—with no carrot to encourage good behaviour. Without hearing more about which other business and property taxes the Government propose to reduce by using the £1 billion that will be raised by the Bill, it is hardto avoid the conclusion that it is intended as a revenue-raising measure rather than to promote regeneration.
	Ministers have made the point that the Bill is a way of trying to change behaviour, which can of course be an important part of the tax system, as it is in the environmental sphere, for example. Has the Minister considered the representations made by the Local Government Association? Indeed, he may want to pray the LGA in aid, because its briefing notes that it supports the Bill. However, it states:
	"It is crucial...that the additional revenue raised is reinvested in the local economy. HM Treasury estimates that£950 million...will be raised...and councils are best placed to decide how and where the additional money can be spent to best effect locally".
	The policy of the LGA is that if money is to be raised it should be used to good effect; otherwise the measure is simply a way of clawing back more money from businesses.

Danny Alexander: I am grateful to the Minister for that intervention. I am trying to make a more general point: there should be some degree of balance in the proposals so that the measure is revenue-neutral rather than a means for Ministers to take an extra £1 billion a year from the business community.
	The impact of the measure is the most important aspect of the debate. It was rightly asked—not least in the context of Stoke-on-Trent—whether the Bill would really promote regeneration. The hon. Member for Stoke-on-Trent, North (Joan Walley) characterised it as a one-size-fits-all measure that might not be appropriate to parts of the country that are most in need of regeneration.
	There are arguments about empty property relief, especially in relation to pension funds and other property owners. As my noble Friend Lord Oakeshott pointed out in another place, for offices and retail premises full relief would apply only for three months. However, even the most assiduous landlord working as hard as possible would usually take longer than three months to let their premises. When the Minister for Local Government responds, perhaps he could say where that three-month time period came from. I hope that it will not be disputed that even the most responsible property owner could take more than three months to re-let their property. If the Minister has not considered that matter, perhaps he could reflect on it and table amendments at a future stage. It would not seem right if even landlords who sought to re-let their properly as quickly as possible were caught with an additional tax burden. If the previous tenant in a shopping centre went bust, it might take some weeks to recover the property, because of the legal process that have to be gone through. In that case, three months would be far too short. It might be six months or longer before even the most assiduous landlord was able to make sure that their property was re-let.

Danny Alexander: I am grateful for that intervention—and, as the Minister said, well spotted. That is a good point. It suggests that six months is a minimum reasonable period in any such situation. It seems odd to have a period of three months. The Financial Secretary did not offer a justification for that when opening the debate; perhaps the Minister for Local Government will do so in his response. I hope that the other speeches are long enough to ensure that he has time to receive the information that he needs.
	In areas where regeneration is needed, the development of commercial property—whether office or industrial—is often done on a speculative basis. Property developers will develop a series of industrial units on the basis that they can see a commercial opportunity. They may have acquired some land and heard a suggestion from the local authority that business parks in the area might help to promote the economy. I am worried. Will the new tax regime in the Bill discourage that sort of speculative property regeneration, on the basis that the developer will be in a less advantageous tax position while the properties lie empty? That question has to be answered.
	That raises a further point. Is the proposed new rating regime a tax on change? It takes time to change the use of a property. It takes time to refurbish a property and it can often take an inordinate amount of time to get the relevant planning permissions in place, although that varies across the country. I represent Inverness, which is the fastest-growing city in the United Kingdom. In locations that are growing quickly, or areas that are changing in the opposite direction and where the economy is contracting, there should be an incentive to encourage people to change the use of their business premises—perhaps moving from factory to retail, office to retail, or retail to domestic use. Planning changes and refurbishment are required in those circumstances. All those things take time—potentially quite a lot more time than the three or six months allowed in the legislation. When he responds, will the Minister address the concern that the proposal will discourage the sort of business changes in local economies that need to be encouraged ascities, towns or local areas grow? Although I would not suggest this, at its most pejorative, the measure effectively means that businesses will be faced witha new tax while the planning system delays their projects.
	The hon. Member for Salisbury (Robert Key) made an excellent speech on rural communities during the Ways and Means debate. There are serious aspects of the measure that will affect rural areas, rather than urban areas. I would be especially grateful to hear from the Minister the efforts that the Government made to rural-proof the Bill before bringing it forward. It is supposed to be common practice that all legislationis rural-proofed. If there is documentation on the rural-proofing of the measure, I hope that the Minister will place it in the Library so that all Members concerned can read that information.
	Those of us who represent rural constituenciesknow that changing economic circumstances might necessitate, for example, the conversion of a hotel into flats, which happened in a village in my constituency relatively recently. Again, that process takes a great deal of time.

Danny Alexander: I can do no more than expressmy wish that the Minister will address the hon. Gentleman's useful intervention during his winding-up speech.
	The Minister needs to reflect more on rural communities. It can take a good deal of time for a small industrial unit in a rural area to be re-let, even with the owner's most assiduous efforts. It can often take a great deal of time for a new business venture to spot an opportunity in a rural location. Changing the tax regime will not alter that situation, but simply take more money out the system and perhaps threaten the viability of the business owner who wishes to make a change.
	The measure could affect the situation facing post offices. I deeply regret the fact that the Government are going ahead with plans to close 2,500 post offices.As the House will know, sub-postmasters and postmistresses are small business people who own their premises. If they will be subject to compulsory closure, they will no doubt receive a compensatory payment, as would be only appropriate, but it might well be for them to find an alternative use for the property, whether by letting it or selling it on. Will former sub-postmasters and postmistresses be expected to pay the new taxation while their premises remain vacant, even though the Government will have enforced the closure of the business? I hope that the Minister will address the circumstances of post offices because that is a significant issue.
	The Bill rightly contains an exemption for charities and community sports clubs. However, the ownership of community facilities by community companies is becoming more prevalent. Perhaps that trend is more common in Scotland than in England and Wales, but it is none the less increasing. I hope that the Minister will be able to reassure me that premises owned by community companies will be exempt from the change, given that, as I would hope that hon. Members on both sides of the House would agree, such community involvement in the ownership of facilities should be encouraged. Substantial risks for community companies could be inherent in the new regime, so the situation must be addressed.
	Will the Minister clarify one other point that has been raised with me? It relates to unoccupied buy-to-let properties. There may be differences of opinion about the buy-to-let market among Members of different parties, but in my constituency it causes great problems with the sort of property that first-time buyers might seek to acquire. What is the position of unoccupied buy-to-let property under the Bill? I have heard stories about buy-to-let; indeed, in my constituency, there is a case of a buy-to-let property speculator buying a number of flats in one development and not letting them, but instead sitting on them in order to take advantage of the capital appreciation.
	A point has been made about the impact on pension funds, and that is a significant issue that needs to be addressed. My noble Friend Lord Oakeshott has calculated that the measure would take some £150 million a year out of pension funds, and the impact on the overall capital value of pension funds would therefore be worth some £3 billion. I do not think that that is scaremongering. The Minister may regard it as a price worth paying, but I should certainly be interested to hear his justification on that point.
	I understand and have some sympathy with the Government's overall objectives, but a great number of questions concerning the Bill remain to be answered. I hope that they will be dealt with satisfactorily as the Bill completes its further stages.

Bob Neill: As a matter of principle the House should be wary of legislation that begins with an algebraic formula, although that may be a throwback to my wrestlings with algebra when I was at school. The Bill actually begins with two formulae; in fact, the whole of thefirst clause is effectively two algebraic formulae. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) rightly observed that legislation has to be rural-proofed, but I am beginning to think that it should be mathematics-proofed, or algebra-proofed, too. I am tempted to read out the whole of the first clause for the edification of those who have not read it, but I will spare everybody that. It makes one wonder what lies behind the algebraic formula, and that brings us to the motives and to the point that I raised in an earlier intervention, which has already been addressed. I know that the Minister for Local Government is straining to say that there were other things that he could have cherry-picked, but it is significant that the Bill has been brought forward as it has been.

Bob Neill: As always, I am grateful to the Minister for his useful point. I assure him that my aversion to algebraic formulae knows no party boundary, and I suspect that the 1988 Act did not commence in the same stunning fashion as this Bill. What concerns me is that there is a feeling among many people, and certainly among my constituents, the Federation of Small Businesses notwithstanding, that the Bill is essentially a revenue-generating exercise. The Financial Secretary to the Treasury, with his usual reasonableness and skill, said, "No, this is essentially a regeneration exercise, and a supply-enhancing exercise", but some of us are rather sceptical about that given the way in which the measure has come about. There is a real worry among many of my constituents, particularly those with small businesses, about what lies behind that algebraic formula.
	Hon. Members in all parties have drawn attention to the situation in London and the south-east. If the Bill is a regeneration exercise, it is a high-risk strategy that the Government have embarked on. Those risks have been mentioned by every speaker in the debate, except those on the Treasury Bench. I hope that, as the Bill makes progress, Ministers will flesh out what they intend to do to ameliorate and mitigate those risks.
	It was suggested earlier that the Bill was designed to tackle the particular situation in London, and the Financial Secretary referred to the vacant property rates in London and one or two other places. As I endeavoured to point out when I intervened and as I shall elaborate, even to me as a London Member of Parliament the situation in London is not entirely straightforward. There is a huge difference between the highly charged economy of the west end and the City of London, which is financial-services dominated and where property and rental values have been driven up for a raft of reasons, and the economy of other boroughs in the city. That applies to suburban areas such as mine, and also to some of the inner-city boroughs, where there is a real regeneration issue. That is why the concerns expressed by my hon. Friend the Member for Surrey Heath (Michael Gove) and others about the effect of the Bill on regeneration activities are well founded.
	The Financial Secretary spoke about the worryingly—from his point of view—and, I assume, the unacceptably high vacancy rates of 16 per cent. in the City of London. He might take comfort, for his argument, from the thought that according to the published statistics that has broadly doubled since 1998. That is by no means the whole picture in London. The London borough of Newham has vacancy rates of some 14 per cent. That figure has remained consistent throughout the nine or 10-year period, so it cannot be suggested that in Newham there has been a speculative holding on to vacant sites because of the potential from, say, the Olympic development. The situation existed long before that possibility arose.
	In Hackney, for example, there has been a fluctuation from 30 per cent. at the start of the period down to 20 per cent. and back to 28 per cent. The vacancy rates have always been stubbornly above the20 per cent. level, which indicates that there are a raft of reasons or high levels of vacancy. The reasons why it is difficult to get commercial premises let and occupied in Newham and Hackney are very different from those causing premises to be vacant in the City of Londonor Westminster. Unless significant exemptions and safeguards are built in, perhaps by the regulations, about which we have not heard much at this stage, the Government's approach may be a blunt instrument that does as much damage in some quarters as it seeks to do good in others.
	In my London borough of Bromley, we have a vacancy rate of some 4 per cent. That has fallen from its high of 6 per cent. We are pleased that that is a comparatively low vacancy rate. I hasten to add that that is in no insignificant measure due to the enlightened policies of the Conservative-controlled London borough of Bromley council, working with our private sector partners. The master plan that we have just published for Bromley town centre will, I hope, build on that. I know from my time in local government, and I agree with the Government onthis, that many local authorities seek to encourage commercial development. That is why, as the Minister knows, I favour a return of the business rate to incentivise local authorities in that regard.
	However, that is not the whole picture. I know from taking a walk up my high street that, even in Bromley, although we have a thriving centre around the Glades and the southern part of the high street, that 4 per cent. vacancy rate masks the fact that there is almost complete occupation at one end but a much higher rate at the northern end of the town centre, for example, where smaller premises usually owned by individual landlords are struggling to compete because the trade is drawn further south.

Bob Neill: The hon. Gentleman is absolutely right. I am almost beginning to regret that I no longer practise law, because the greatest business growth might be for those lawyers who appear in rating tribunals, and who argue exactly that sort of neat and interesting point. I am sure that that is not the type of job creation that the Government were intending, but it might be the result. We need to hear a great deal more from the Government on such a serious point. We do not know whether rating appeals are likely to increase significantly, or what burdens will fall on the system,in addition to the other burdens affecting local authorities.
	Generally, those of us who look at our own shopping centres do not believe that properties are deliberately left vacant. It is tough enough for smaller landlords to survive without such burdens being placed on them. In areas such as mine I am concerned that, if smaller landlords find that the additional burden tips them over the edge of viability, they will be forced to sell up. The only people who will be able to take advantage and buy will be the large landlords—Tesco, Sainsbury'sand the others, who will gobble up yet more sites. Ashas been pointed out, they can bear the cost, proportionately, of land banking. That cannot be what is intended; it is hardly consistent with the Sustainable Communities Bill, on which I am delighted to see the Minister is increasingly a convert. Those of us who want and value diversity of tenure in our town centres would be concerned if the Government's proposals had such an unintended consequence.
	It is also worth remembering that the commercial property sector is important for the UK economy. The retail sector alone has an aggregate rateable value of some £38 billion, which is hugely important to our economic interest. Overall, current estimates suggest that about 7 per cent. of that is vacant. That might suggest an aggregate rateable value for those vacant properties of about £2.5 billion.
	That brings me back to my concern about the motivation for the proposal. I agree that the Local Government Association was supportive of the proposals, but for the reason that caused me to support the return of the business rate—that any additional money raised had to stay in the local economy, where it could be used for the benefit of the local community. No such safeguard appears anywhere in the Bill. No algebraic formula ensures that that money will go back to the people of Bromley or any other local authority. The danger is that it will go straight into the hands of the Treasury. The way in which the Treasury has increasingly nationalised revenue raised from local sources is one of the real problems that we face in trying to make our local communities sustainable.
	Taken in the context of other Government measures—powers to trim back business rates across the board, and the removal of the exemption on agricultural land and farmland, of which Bromley and Chislehurst has some but not much—there is real concern about the effect of the proposals. Small businesses in my part of the world have been concerned that previous measures enacted by the Chancellor of the Exchequer have damaged them. The fact that the small business rate relief was not automatic led to a considerable drop in take-up. That was a burden placed on small businesses, and they fear another burden of the same kind.
	We look to the Minister to act. The only occasion on which I parted company from my hon. Friend the Member for Surrey Heath was when he described the Minister as frugal. As we know, the Minister is capable of acts of great generosity, and we look forward to its being redeemed in due course. My hon. Friend the Member for St. Albans (Anne Main) is not present at the moment, but if the Minister feels inclined towards the same generosity on this occasion, perhaps she should be awarded a prize for the "champagne moment" of the debate.
	I hope that by now the Minister has an answer to the point that I have raised. He nods, so I can sit down.

Philip Dunne: Let me begin by reminding the House of the origin of business rates. They were developed in, I believe, the late 1960s as a way of raising revenue to help fund local services. That is, of course, a worthy purpose, but now a Bill is being introduced whose purpose, far from being to help fund local services, is to help plug holes in national debt. It is highly regrettable that a form of local revenue raising should be used simply to raise revenue.
	We have been led to believe by the way in whichthis Bill was described—or barely described—by the Chancellor in his Budget speech, and the way in which it was introduced by the Economic Secretary in the Ways and Means debate and again today by the Financial Secretary, that it is somehow of benefit to broader society. Indeed, I believe that it has been described as of environmental, social and economic benefit. It is, however, plainly and simply a money-raising measure, and a significant one at that. As was pointed out earlier, the Red Book states that in the first year alone the Bill will raise £950 million, which makes it the fourth largest revenue-raising measure in this year's Budget. An enormously significant measure is being introduced behind a smokescreen of social good, and I hope that my speech will help to explode the myth. There is another possible explanation. It may—not for the first time—be a case of the Government's basic lack of understanding of some of the commercial realities that underpin economic activity in large parts of our economy. I shall say more about that later.
	The Government claim that the Bill will help to establish a more level playing field between different types of property use. That is true to an extent, but only to an extent, because the Bill maintains the distinction between commercial premises for retail, office and other use and those for industrial and storage use. If the Government were being straightforward, they would have acknowledged that.
	My hon. Friend the Member for Surrey Heath (Michael Gove) used an expression that may be common Scottish, or perhaps Surrey, parlance. He said that the Government were "praying in aid" both Sir Michael Lyons and the Barker review to provide justification for the Bill. Indeed they are, although I would use rather more basic and less colourful language. I would say that the Government were hiding behind the claims in those reviews to provide some sort of ethical justification for a tax grab.
	There are some difficulties with that approach, not least Sir Michael Lyons' comment that the Bill would constitute an appropriate reform in the context of other measures that he thought the Governmentmight like to introduce. He was advocating that the Government should wait until the revaluation that he was proposing, which would start in 2010, so the negative effect on business of this increased taxation could be absorbed within the adjustments to rental valuations and the impact that that would haveon business rates and rateable values. He wrote in section 8.107 of his report:
	"Depending on the size of complexity of the task involved, it might be possible to remove exemptions from the beginning of the 2010 list in April 2010."
	Of course the Government have leapt upon that suggestion and, as we have heard—notably from my hon. Friend the Member for Bromley and Chislehurst (Robert Neill)—taken it up with alacrity because of the significance of the revenue-raising measure.
	Sir Michael Lyons made some interesting observations about the extent of business rates and their impact on revenue raising for the Government and on businesses in general. Rates are a very significant tax revenue raiser—[ Interruption.] I do not know if the Minister for Local Government is intending to intervene—

Philip Dunne: As I will explain, I am seeking to highlight merely the degree of taxation raised in the measure. I am not suggesting that the Government are doing anything inappropriate; clearly, they have a job in raising tax. It is the manner and extent of the tax and the measure that I am concerned about.
	Sir Michael Lyons pointed out in section 8.9 of his report:
	"Business rates are a significant tax for businesses—in 2006-07, they are expected to raise about £18.4 billion in England(£20.3 billion across the UK), compared to £47.5 billion (net of tax credits) in UK corporation tax".
	Business rates are now raising almost half the amount that businesses pay in corporation tax. The impact of that is distorting, depending on the sort of business. Many contemporary businesses—recently established businesses that are developing their business as aresult of technological change—do not require many premises to operate from. Operating online, it is possible to exist with a very modest proportion of one's profit going in the form of business rates. I want to develop that point. The suggestion in the Lyons report was that, on average, about 3 per cent. of turnover is paid by business through business rates, but he acknowledged that that varies significantly between companies in different parts of the country and different sectors of the economy.
	The impact noted by Kate Barker in her report was:
	"The principle behind (empty rates relief) is to create a broadly symmetrical tax, given uncertainty: when a property earns a positive revenue, it is taxed; when it does not, relief is granted. This helps remove what would otherwise be a distortion and helps to share risk between property owners and the government."
	I quote that because the Government are arguing that they are removing a distortion by reducing this relief and are claiming support for that argument in what Barker and Lyons have said. Barker pointed outthat the distortion is itself balanced by the relief. Lyons made the point that the impact falls very disproportionately on different parts of the economy. Therefore, this measure will also fall disproportionately and will have unintended consequences on different parts of the economy. I shall discuss that later.
	Let me illustrate the extent of the differential. As my hon. Friend the Member for St. Albans (Anne Main) rightly said, some major supermarket chains can afford to retain land banks and pay rates on vacant property. In responding to the Barker review, it was pointed out that in 2005 Tesco spent 13 per cent. of its profits on business rates, compared with 1 per cent. of profits for a mobile telephone operator, which is a high-street competitor. I therefore contend that the evidence from Lyons and Barker is somewhat contradictory and does not necessarily support the Government's argument that the measure is not distortive. The retail market is changing so rapidly as a result of the internet thatthe measure will compound the problems being experienced by many retailers with significant high street presences. Trade is moving online and out of premises, and this measure will exacerbate that. I will talk about the retail sector shortly.
	Another impact addressed in the Lyons review and which has been misunderstood by the Government is to do with the timing of rental voids. The Lyons review assumed that properties remain empty for the duration of the relief, but that is not the case. As my hon. Friend the Member for St. Albans said, speculative developments tend to be large and complex and have many occupiers, and there is often a considerable period of time between the point when the property is completed and the point when it is entirely let. I contend that one reason why vacancy rates are higher in areas such as the City of London and Westminsteris that they are desirable locations. That draws in speculative development during periods of strong market growth, and it is in the interests of the developer to hold out for the highest possible rent because that will enhance the capital value of the project.
	The capital value of a project is what is of greatest significance to the developer undertaking a speculative development, rather than the running rent, which isof most interest to the occupier. It is therefore unsurprising that there are higher vacancy rates in areas of strong demand. This measure will have little impact on that, as it is relatively insignificant in relation to the overall rent that the developer anticipates he will have to forgo for the period until the property is fully let. That was not well understood in the Lyons report.
	A British Retail Consortium submission to the Chancellor in advance of the Budget referred tothe fact that surveyors conducting appraisals for development in regeneration areas typically anticipate letting voids, following completion of construction, of 18 to 24 months—the voids are, I assume, slightly longer for properties in regeneration areas than for those in areas where there is already a ready demand. That suggests that the duration of relief for retail and office premises is already relatively short when compared with the void periods for such properties, and this measure would exacerbate that problem.
	I referred in an intervention to a point that the Federation of Small Businesses made to Sir Michael Lyons, and that was repeated by my hon. Friend the Member for Bromley and Chislehurst. I hope that when he responds to our debate, the Minister will acknowledge that the FSB wants to understand the exemptions on which the Government intend to consult, because it hopes that its members can benefit from them. I would therefore welcome a little more explanation from the Minister.
	May I touch briefly on the commercial consequences of the relief, particularly for retailers? I had a 20-year involvement in retail until last year, most of it in provincial high streets. However, we also had exposure to shopping malls, both in and out of town, so I have some experience of the impact of business rates on retail premises. It is in that particular area that the FSB seeks to develop exemptions, and I hope that the Government will show it some sympathy. The Government argue that by increasing the amount of business taxation on empty properties the Bill will consequently reduce rents in some way. That is probably a correct interpretation when applied to vacant industrial units in run-down areas that require regeneration and where ownership is likely to be not on a continuing lease, but in the hands of a developer or owner who can reduce rents. However, in many cases, and certainly those where properties are empty yet still subject to tenancy, that does not apply.
	The Financial Secretary referred to the complexity and rigidity of the structure of lease documentation and tenancy contracts. That problem should be well understood by the Government because it is not easy, even in legislation, to rewrite commercial contracts that, in many cases, stretch over decades rather than years. Indeed, in the 20 years that I spent in the retail business, the average duration of leases into which we entered was initially 25 years. After 20 years, it came down to about 15 years, but it will take many years to change practice in the property market and the problem cannot easily be solved in legislation by any Government.
	Consequently, as developers seek to build, for example, a shopping mall, they will wish to take into account the probability that they will have to pay more to the Government for voids as a result of the measure while they develop and let their properties. Far from reducing the rents that they charge tenants in the mall, they will increase them because they must recover the outgoing additional tax that they would not otherwise have to pay. That is the nature of evidence submitted to my hon. Friends and me by professionals in the property industry and those who represent retailers. I hope that the Minister recognises, as I said earlier, that while it may be true that rents will come down for certain types of property, for many others that simply will not happen. The initial developers will raise rents, and that will apply in the office sector, too. In cases that do not involve new build but existing premises, the rents are fixed, and there is nothing that the owner can do about it until the end of the lease.
	May I dwell a little more on some other consequences of the measure for the retail trade? Where trade takes place in a strong location, in a strong retail market, if a property becomes empty a void can be readily filled, so the measure will probably make very little difference. However, that applies to only a relatively small proportion of retail space in periods of economic growth. The retail sector is not in that situation at that moment—a lot of retail trade, as I said, has moved online and many retailers are not looking at a growing market: they are defending their market share, which is subject to competition.
	In many other instances where there is a strong location and a weak retail market, an empty property void might take many months to fill. Equally, in a weak location with a strong market it might take many months to fill premises. However, the real problem arises where there is a weak location and a weak market. That situation might cover some of the examples given by my hon. Friend the Member for Bromley and Chislehurst regarding one end of Bromley high street. Who has to solve that problem? It is not the owner of the property, which is what the Bill indicates, but the tenant—the occupier of the property. I hope that the Minister will be able to convince me that that fundamental misunderstanding has been, or will be, taken properly into account when looking at these exemptions. Nor is it necessarily the problem of the tenant who has just vacated the property—as a result of the lease contract, the problem often reverts to the previous occupant. Should the tenant who has had to close down the business also become bankrupt and cease trading, the lease reverts to the previous tenant.
	I do not know the circumstances of the new Kwik Save company, which has just decided to close a lot of its stores, but it would not surprise me if the original vendor of the new Kwik Save stores—I think that it is Somerfield—is feeling a bit anxious about what might happen to those leases. Should the business not be able to fund the business rates and rents of those premises, having been unable to get rid of them, the cost may revert to Somerfield. Such situations arise throughout the country and are particularly applicable to small chains of a relatively small number of stores, which are often unable to trade satisfactorily in all those stores and therefore seek to close the worst-performing ones. All portfolios of retail stores have some strong performers and some poor ones. If the business is strong enough to cope with the closure of a small number of stores, all well and good; if it goes out of business, the problem is writ large.
	The problem is particularly applicable to small provincial high streets. We are already experiencing a shift of trade out of the small market towns and into the larger retail catchments, where there is greater choice and more destination shopping, and which can compete better with the internet than many local high streets can. So as part of the consultation, the Government need to look carefully at high streets in provincial areas throughout the country. The Royal Institution of Chartered Surveyors said that the Bill will undoubtedly affect many businesses; it seemed to be thinking in particular of businesses in the smaller town high streets.
	I want to pick up on a few of the points made by the Financial Secretary. He referred to local authorities' enthusiasm for the Bill, and in discussing their response to Lyons he touched on Hampshire county council, in order to bring the point home to my hon. Friend the Member for Fareham (Mr. Hoban). It does not surprise me that local authorities might see this provision as an easy way of raising revenue because it is a stealth tax. It is not paid by the people who —[Interruption.] The Minister for Local Government says from a sedentary position that it is not a stealth tax, but it is a classic stealth tax, in that nobody who puts their cross on a ballot paper —[Interruption.]

Philip Dunne: I am grateful, Mr. Deputy Speaker.
	The proposal is a stealth tax because the people who vote through the ballot box are not directly paying it. It is being borne by businesses, and often by businesses in difficult circumstances; otherwise, they would not have an empty property. It is therefore not surprising to me that local authorities are likely to vote yes to a measure that will not have a direct impact on them.
	Secondly, any local authority asked whether it would like more funds to be raised locally other than through council tax is likely to support that. In the context of the Lyons review, which considered the balance of funding, anything that encourages funding by any means other than the council tax will be attractive to local authorities, especially if there is some prospect of the Government passing it back to them in increased grant. Therefore, I do not take much comfort from the responses by local authorities. I hope that the Minister will tell us how many applications for local business tax he has had from local authorities who would voluntarily increase tax on business. If local authorities had to make the decisions themselves, I suspect that they would react differently.
	Thirdly, the Financial Secretary touched on the vacancy rate analysis and highlighted the high rates in cities. He described it as applying equally in areasof high and low demand, citing Manchester and Birmingham as areas of relatively low demand compared with London. The answer is to offer a differential response, not the same response, to both kinds of problem. I touched on the importance of the rate to speculative developers—the relative lack of impact that it will have on those undertaking speculative development of properties that are sitting idle—because it is in the developer's interest to wait for the market to improve to match their rental expectation. Generally speaking, the developer can afford to do that. It is different for vacant industrial property in our industrial heartlands, where the owner is in a position to accept an occupier at any rental better than zero, because that is in their commercial interest.
	I would argue that the impact will fall elsewhere and the law of unintended consequences will apply. Those in more marginal areas, especially tenants, will find higher vacancy rates as a result of the Bill. The consultation that the Government will undertake is welcome, but why will it take place after the Bill is enacted? Surely the exemptions to the proposal are just as important to many of the sectors that I have touched on as the Bill itself. I suspect that the answer is that the Chancellor is desperate for the money and needs to have this in place as soon as possible.
	Rural diversification was mentioned by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) and my hon. Friend the Member for Bromley and Chislehurst. I was pleased to learn that there are agricultural endeavours in Bromley. The implicit assumption in the Bill is that vacant premises are deliberately left vacant. I assure the Minister that in rural areas it is not the case that properties are deliberately left vacant; it is generally the case that there is either a difficulty in finding new occupants or it takes time—as we heard in a strong contribution by the hon. Member for Inverness, Nairn, Badenoch and Strathspey—to secure a change of use for planning purposes, if that is what is required to turn a redundant building into something else. That is a particular problem in rural areas, where planning policies tend to be more restrictive. Fewer businesses tend to seek premises, with the result that premises can stay idle for longer. Therefore, I urge the Minister for Local Government to consult his colleagues in DEFRA when he considers the impact of the Bill on farmers seeking to diversify into activities that are not purely agricultural.
	The problem posed by different types of property in different areas could be solved by the use of local solutions. I know from previous encounters that the Minister regards himself as a localiser who wants local solutions to problems. I believe that local authorities should be given discretion to implement the proposals as they choose. They are best placed to decide whether businesses in their areas should be allowed to take advantage of exemptions that apply in some places but not in others. In that connection, I cannot resist reminding the Minister about another matter under discussion at the moment. If Shropshire were to go down the unfortunate unitary authority route, people in the most rural parts of the county that I represent—that is, in south Shropshire and Bridgnorth—would be very upset to be told that they must adopt a proposal coming from the unitary authority based in Shrewsbury. That is because the effect of any such proposal in rural areas would be very different from the effect that it would have in Shrewsbury.
	I turn now to the detail of the Bill, and in particular to two provisions in clause 2. I welcome the proposed exemption for charities, but want to echo one note of caution expressed by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. That is that the presence of too many charity shops in a high street tends to deter a proper and balanced retail mix. Charity shops are an indicator of a decline in footfall and customer traffic; they are often established in premises that are otherwise vacant and other activity can be deterred when there are too many of them. I welcome what the Minister wants to do, but point out that it is not all good news, all of the time.
	My absolutely final point has to do with the welcome exemption proposed for community amateur sports clubs. Many sports clubs in my constituency, and I am sure elsewhere, benefit from the Finance Act 2002 provisions giving them a zero value added tax rating, but I hope that the proposed exemption will be applied only rarely. I am pleased to say that the Olympian movement has its origins in Much Wenlock in my constituency, and that the approach of the 2012 games in London means that interest in sport is rising across the country. I hope that no amateur sports groups find that they have empty premises, and so I hope that the proposed exemption is merely a goodwill gesture that is not likely to be used.
	Has the Minister considered extending the proposed relief to other, similar organisations? The hon. Member for Inverness, Nairn, Badenoch and Strathspey referred to community-owned properties. In my constituency, there are many village halls and other community properties. If, for some appalling reason, they had to become vacant, they would find it very difficult to fund the business rates—not least because, often, they are owned not by the parish council but by a villagehall committee. Such committees are a community enterprise of one form or another and have no funding. As a result, their inability to pay the rating bill would be likely to lead to the demolition of premises.

Mark Hoban: That shows the assiduousness of my hon. Friend.
	I shall turn first to the comments of the Financial Secretary, who is not yet in his place. He deployed the representation made by Hampshire county council on the Lyons review because it wrote in favour of the changes. That should be qualified on two counts. First, I suspect that it felt that it would benefit from the additional money that was raised through the measure. Secondly, it was in the context of the wider review of exemptions by Sir Michael Lyons.
	The hon. Member for Stoke-on-Trent, North (Joan Walley) is also not in her place for the wind-up. She expressed a train of thought to which hon. Members on both sides of the House have returned from time to time when she said that she had grave reservations about the impact of the Bill. She was concerned about the impact that the Bill would have on regeneration projects in constituencies such as hers. That theme was picked up in the contributions made by many hon. Members. She said that the Bill would have a different effect on different parts of the country and different sectors of the economy and that the blanket nature of the proposal would lead to unintended consequences for her constituents and people up and down the country.
	The hon. Lady argued that the Bill would benefit the south-east and areas of high demand for property. I am not sure that I agree with that analysis. I shall come on to some more thoughts on that later. I do not think that the measure will help the south- east or areas of high demand, just as the hon. Lady thinks that it will not help her area and regeneration projects there.
	The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) also commented on the regional impact of the measure. He spoke from a position of perhaps detached isolation in so far as the measure does not apply in Scotland, although he felt that it might have some beneficial effects on the property sector in Scotland. He made the important point that, if the sole aim of the measure was to change the behaviour of property owners, its revenue effect would be neutral and there would be some way of recycling the revenue back to local authorities or used in other measures. Of course, we know that the Bill is here to plug a black hole in the Chancellor's forecast.
	It was during the hon. Gentleman's remarks that my hon. Friend the Member for St. Albans (Anne Main) made a telling intervention. She contrasted the different approach to the management of commercial and residential empty property and considered when action was taken to penalise people who allowed property to remain empty for some time. The Minister, in one of his many sedentary interventions, indicated that he would come back to the matter later in the debate. He is looking slightly perplexed because he was not listening. I hope that he is listening now. I was referring to the intervention by my hon. Friend the Member for St. Albans about the different treatment of commercial and residential empty property.
	My hon. Friend the Member for Bromley and Chislehurst (Robert Neill), despite his confessed aversion to algebra, made an important contribution about the impact of the Bill. Clearly, it did not stand in the way of his looking at the impact of the measure on his constituency. He talked about the two economies in London—the City and west end, and the suburbs, one of which he represents, and London boroughs. It is worth reflecting on the argument about the benefit to the south-east and high-demand areas. I am not sure that I understand the Government's logic. In my constituency and the neighbouring areas in south Hampshire we have a lot of economic activity; it is a vibrant area economically. We have a low rate of vacancy. The Library provided figures in the research paper about vacant properties. The vacancy rate in the City of London, which has been mentioned a couple of times as a sign of overheating, was only 8 per cent. in 1998-99. It only grew significantly—to 16 per cent.—in 2004-05, so there is no consistent pattern of high vacancies.
	My role in the shadow Treasury team includes responsibility for regulation and taxation of the financial services sector so I spend much time talking to people in the City and I know it well. The growth of the financial sector in recent years has led developersto build speculatively in anticipation of demand for business property in the City. That is not a sign of overheating; it is a normal commercial reaction. People are developing property to accommodate growth in demand for high quality office space in the City, so I am wary when the Government want to use vacancy rates, which actually fluctuate significantly from year to year, as an argument for the effectiveness of their proposals.
	The hon. Member for Blaenau Gwent (Mr. Davies) made an important point about how long property remains empty in his area. I am not sure that the Bill would help his constituency or promote occupancy of some of the premises in his area that have been empty for so long. There have been high vacancy rates, on a sustained basis, in some London boroughs for the past seven or eight years. Hackney was mentioned; the vacancy rate there was about 30 per cent. in 1998-99 and is now 28 per cent. There was a dip for part of the period, so the figure did not remain constant. In Newham, vacancy rates remained static and at a high level, so I am slightly sceptical about the benefits the Government think the measure will bring in termsof the occupancy of empty property. Praying in aid property hot spots such as the City does not strengthen their argument.
	My hon. Friend the Member for Bromley and Chislehurst highlighted the fact that the tax increase will raise about £0.9 billion, which will not be recycled to local authorities. The money will stick with the Treasury and be used in different ways, but it will not be returned to the local authorities whose local property market will change as a consequence of the measure.
	My hon. Friend the Member for Ludlow spoke not only from his constituency experience but also from his business experience in retail. He made some important comments about the state of the property market and how letting voids can occur in small provincial high streets. As he said, it is a complex sector yet the Government propose a one-size-fits-all policy for every high street and every industrial park in every constituency and the effects will differ depending on what is happening in the market in each of those constituencies. That makes it hard to argue with the certainty expressed by the Government that the measure will suddenly produce lower property rents and enhance economic activity in our constituencies. That will not necessarily be the case.
	My hon. Friend mentioned the caveat to the Federation of Small Businesses argument. The Government have prayed in aid the FSB in this debate and elsewhere, but it recognises not only the possible benefits but also the possible costs of the measure to small businesses, demonstrating yet again that the measure and its impact are not straightforward. That is part of the problem with the proposal. As hon. Members on both sides of the House have indicated in speeches or interventions, there is going to be a differential impact that will not to be easy to predict. Prior to introducing the measure, the Government should have consulted much more with those involved in the property market to work through the impact fully, rather than looking at things in a somewhat piecemeal way.
	At the heart of the measure is the fact that it raises £900 million in tax. The fact that the debate was opened by a Treasury Minister, for the second time, indicates that the fundamental driver of the measure was to raise additional money to sort out some of the Chancellor's financial problems at the time of the Budget. The Barker and Lyons reports were a convenient fig leaf to justify the increase. The Financial Secretary prayed in aid the Lyons report, but, as my hon. Friend the Member for Ludlow and others have highlighted, the Lyons report suggested that the proposals could be introduced in 2010, not the next financial year.
	This year, the property sector has seen not just a change in the relief for empty property, but the start of the abolition of the industrial buildings allowance and the agricultural buildings allowance, which we have debated in the Finance Bill Committee over the last few weeks. Those are significant tax changes that will impact on the way in which the sector operates.  [ Interruption. ] The Financial Secretary said from a sedentary position that he referred to the example of real estate investment trusts. We seem to have one setof measures that move in one direction and anotherset that go in another direction. There is a lack of consistency when it comes to the direction that the Government are taking on the matter.
	The Government have argued that changing the empty property relief will bring forward new commercial property for rent, which will reduce rental levels. However, the detail in the regulatory impact assessment indicates that the fall in rental would be about 0.25 to 0.5 of 1 per cent. That would be insufficient to tackle the international differences, the inter and intra-regional differences, and the intra-city disparities that have been cited by Ministers over the course of the debate.
	When the Economic Secretary opened the debate on the Ways and Means resolution, he cited the difference in property rentals in different locations in Newcastle—a city with which I am familiar and that I visit regularly. He said that there was a big difference in the rent between Eldon square and Lower Grainger street. If the Economic Secretary, or any other Minister, visited those two centres, they would see exactly why there is a big difference in rent. It is nothing to do with the level of empty property; it is because one area is a major shopping centre—a destination for people across the north-east to visit—and one is not. To a large extent, simple market forces dictate why those rents differ. I cannot see how the changes that the Government have brought forward will reduce significantly the disparities in the rents in those locations.
	So, what are the arguments against the measure? It is worth reflecting that the weight of opinion seems to be critical. The British Property Federation and the Royal Institution of Chartered Surveyors highlighted the impact that the measure would have on the viability of regeneration schemes—a point that was also made eloquently by the hon. Member for Stoke-on-Trent, North. There is a possibility that buildings will remain empty and that the costs that people will incur as a result of the measure will dissuade them from putting together development packages and will make it less attractive for them to regenerate areas.
	The Financial Secretary mentioned in his opening remarks the business premises renovation allowance—he also cited other measures, such as ones to tackle Japanese knotweed. It is interesting that the British Property Federation said that the allowance
	"will not, in our view be sufficient to redress this concern as it will only apply to specific areas."
	Even if we rely on the Minister's stand-by of the package of measures, given that the package will not apply throughout the country, there will be differential effects. Insufficient might be done to make schemes in the constituency of the hon. Member for Stoke-on-Trent, North financially viable.
	My hon. Friend the Member for Ludlow touched on the fact that we are going through a process of economic change. The way in which people manage their property portfolios is affected by changes to the economy. As the economy expands and contracts,the nature of activity changes. My hon. Friend cited the fact that in retail there is a move away from bricks and mortar towards the internet, which will have an impact on people's decisions about what to do with their premises. If people with expanding businesses think that moving to larger premises will cause them to incur a higher cost because the old premises will remain empty for a long time, it might inhibit them from adjusting their operations and taking advantage of opportunities.
	The measure might discourage landlords from accepting lease surrenders because they would prefer the occupier to pay the cost of an empty property. Again, that would have an impact on businesses of different sizes throughout the country. There is a general move towards more flexible leases and attempts are being made to promote better relationships between landlords and tenants. However, if the period for which a property may be empty is reduced, landlords will not be keen to grant short leases or regular break periods because they will want to protect themselves against additional costs. Both the British Property Federation and RICS have expressed that concern in their briefings on the Bill.
	The comments made in the Chamber and elsewhere have given me the loud and clear message that the measure has been introduced without proper consultation on its impact on the complex relationships between landlords and tenants, and business sectors and communities. The Government are yet again acting in haste and making decisions on complex matters that will need revisiting. In the time since our debate on the Ways and Means resolution, there have been changes to the treatment of property that could be vandalised, which the Government have reflected in the Bill.
	The Government should have paused and thought more carefully before introducing the measure. Let me cite again the British Property Federation:
	"A proper consultation with industry would allow a reform of business rates on empty property based on how the property markets actually work, rather than measures based on very limited evidence, including certain well publicised behaviour that has in the past occurred at the margins. It is for this reason that the principal recommendation of the combined industry group is that the proposals are deferred until 2009 in order to allow this consultation to be undertaken".
	The Treasury has not always a demonstrated a clear understanding of the way in which property markets work. The Government have already made several U-turns on property measures. Residential property was going to be in the SIPPs scheme—self-investment personal pensions—but was then taken out. Stamp duty was reintroduced for commercial property in disadvantaged areas because the Government misjudged the take-up of the relief. As the speeches made by hon. Members on both sides of the House have demonstrated, the Government need to think through the impact of the Bill very carefully. When we consider the Bill's remaining stages next Thursday, we will have yet another opportunity to air these issues. The Government will be able to demonstrate whether they have listened to the wise words spoken not only in the House, but outside it.

Michael Gove: I am grateful to the Minister for acknowledging that, in his Budget speech, the Chancellor of the Exchequer accepted the submission made by my hon. Friend the Member for Tatton (Mr. Osborne) and lowered corporation tax, though not quite to the level that he suggested.
	The Minister claims that he has never argued that property developers deliberately leave their properties empty, but in the debate on the Ways and Means resolution he said that
	"there are many examples of companies who build offices,turn the lights on brightly to advertise them, stick a For Rent notice outside, hire a security guard and disappear to the Mediterranean.—[ Official Report, 10 May 2007; Vol. 460, c. 363.]
	That is an example of precisely the sort of behaviour that he says he did not describe, and which we said did not occur.

Phil Woolas: The hon. Member for Ludlow argued that in his experience, which is more substantial than mine, property developers made speculative decisions. I presume the word "speculative" means that they takea risk. At present they know that they will not be required to pay business rates on empty properties, so they factor that in.
	My right hon. Friend the Member for Rutherglen and Hamilton, West (Mr. McAvoy) is ever present and I need to answer the debate. He is not in the Chamber; he is just ever present— [Interruption.] And all-powerful.
	The point about deliberate vandalisation, whichwas mentioned by a number of speakers in the debate, relates to the schedule. We see it is good planning to ensure that there should not be such a tax avoidance measure. I can give reassurances on that point, and on the allegation that there may be increased bureaucracy. Empty properties are already part of the tax base and there is no expansion of that. The Valuation Office, whose job it is to consider such matters and appeals, already has empty properties in its remit. Although it is the billing authority that collects the tax, it is the Valuation Office that checks that. I hope that that provides some reassurance.
	I thank the hon. Member for Blaenau Gwent (Mr. Davies) for staying through the debate to make his points on behalf of his constituents. He raised three points, the first of which was about his fear about empty properties. It is a similar point to that raised by my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley). If properties are empty for a substantial period as a result of low demand, the valuation, which is based on rent, will be very low. By definition, a valuation officer is required to assess the valuation on that basis.
	In our argument we use the City of London, Westminster, Manchester and Birmingham as particularly strong examples of areas where there are high rents and relatively high vacancy rates. This not a south-east matter. As I have said before, my own area in Greater Manchester, Manchester city, has higher rents than the island of Manhattan. That is a testament to this Government's hugely successful stewardship of the economy, which is a matter of fact. Twenty years ago, I doubt whether I would have been able to say that cities such as Birmingham and Manchester were in these high-growth areas, but they are now. This is not a north-south issue. I caution Conservative Members not to make the mistake of thinking that we are all poor up north. We are not: we have some very rich areas raising high business rates, which we redistribute to poorer areas, some in the south of England, goodness me, and not far away from the constituency of the hon. Member for Fareham (Mr. Hoban)! I am pleased to report back to the House about that.
	More seriously, let us look again at the figures on vacancy rates and the amount of empty property relief claimed, to which my hon. Friend the Financial Secretary referred earlier. The latest figures for 2006-07 show the 10 highest authorities and top of the list, of course, is Westminster, with some £72 million. Then we have the City of London at £65 million; Birmingham, £42 million; Manchester, £37 million; and so forth. The latest figures published last year show at the bottom of the list areas such as Teessdale at £91,000; Chester-le-Street, £192,000; and Castle Morpeth, £307,000—but they are not all in the north. I was hoping to tempt an intervention from a southern Member, but so far I have not. I am holding back on some in the list— [Interruption.] It looks as though I have tempted someone to intervene.

Phil Woolas: Except, of course, that we have a regular revaluation of non-domestic rates every five years. Because of our successful policy of regular revaluation and capping the ratio at inflation, those revaluations take place without a murmur from Conservative Members, despite the fact that they bang the drum about the alleged evils of domestic rate revaluation as though it were the end of the world. The hon. Gentleman is not rising to the bait, so I shall move on, but there is no evidence that it would take 15 to25 years. In any event, to be fair to him—I recognise the "real world" point that he is trying to make—I said that that would be the logical conclusion of the argument, but because of our hugely successful economy, all this country's shops are not going to shut down. As the hon. Gentleman knows, the retail sector is one of the flagships of our economy, as my town centre manager is reporting, but I need to move on.
	I was replying to the hon. Member for Blaenau Gwent, who had raised the issue of domestic properties. As he knows, the provisions do not cover that, but there are circumstances in which council tax is relieved on the renovation of empty homes. Indeed, as I explained earlier, it is the capital value, not the rental value, that applies. I recognise the significant experience of the hon. Member for Ludlow in retail centres in towns and cities, although not the big cities, throughout the country. It is fair to say that the Government need to consider the differential impact. My hon. Friend the Financial Secretary referred to the consultation.
	The hon. Member for Ludlow and the hon. Member for Fareham both made the allegation that the Government were hiding behind the fig leaf of Barker and Lyons. When we agree with a consultation, we are accused of hiding behind a fig leaf, and when we disagree with a consultation, we are accused of arrogantly riding roughshod over it. Both points cannot be true. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander)—it is easier just to say, "the hon. Member for the Liberal Democrats", which is a little tip that my hon. Friend the. Member for Bolsover (Mr. Skinner) gave me—accused us of not consulting. Of course we have consulted. The Barker and Lyons reports were substantial pieces of work, which we studied and took seriously. I note that his party said that we had kicked the document into the long grass without even reading it. Again, he cannot have his cake and eat it.
	I have answered the point made by the hon. Member for Ludlow about commercial activities and the ratios between non-domestic rates and corporation tax. He also asked about consultation. We did, of course, consult on Lyons and Barker, and another consultation will take place later this year. A Committee of the whole House will take place, as this is a finance measure but not part of the Finance Bill. We have given the issue a generous amount of time.
	The hon. Member for Ludlow brought his experience to bear on the issue of leases and made an important point. My hon. Friend the Financial Secretary made a specific point about leases, the need to consider the impact on them, and the consultation that will take place, particularly with regard to onerous leases. The hon. Gentleman also asked about business improvement districts. There have been 40, and there are more in the pipeline. I am not making great claim for them, although I think that they are very useful in the areas where they exist. We have one in the centre of Oldham, for which I voted; I am obliged to pay into it, and jolly good it is too.
	The hon. Gentleman asked about Manchester and Birmingham. I will not tease him, but I think that he was just making the point that the richer commercial areas have to be treated differently from the rural areas. The hon. Member for the Liberal Democrats asked about rural proofing, which we believe the regulatory impact assessment does. I should also point out that rural rate relief schemes are in place.
	The hon. Member for South Norfolk (Mr. Bacon), who is no longer in his place, made an important point about empty farm buildings in relation to an empty pig farm. Agricultural buildings do not pay business rates; they are treated differently. The impact in such areas is therefore taken into account by that. The hon. Member for Salisbury (Robert Key) made some similar and important points about the interaction between planning policies and procedures and rates for empty properties. We are addressing those points in relation to planning policy. Two of the three examples that he raised, which I have researched, are matters for planning policy. When we debate planning policy, however, I hope that the Opposition will resist the temptation to accuse us of riding roughshod over local opinion, building over the countryside, demolishing our heritage buildings and so on, and that their arguments will be consistent—as they no doubt will be in the debate on the Sustainable Communities Bill—with what they have called for in this debate.
	It is advantageous for Opposition parties to be consistent in their arguments. I was going to say "to have consistent policies". It would be nice if they had any policies, but let me be non-partisan and say that the points about planning are important.
	The hon. Member for Ludlow also asked about the localisation of relief, as part of the recent pendulum swing towards localism in the Conservative party. I wonder where it will end: in kibbutzes in Shropshire, perhaps.
	I remind the House that it was the Conservative party that nationalised the rate of tax on empty properties in 1981, removed discretion for empty rates on industrial policy from local councils in 1984, and nationalised the whole lot in the Local Government Finance Act 1988. However, if they are moving in the other direction now, I welcome that.
	The hon. Member for Bromley and Chislehurst (Robert Neill) spoke on the basis of experience rather than a Conservative research department briefing. I congratulate him on that, and on the fact that he distanced himself from his Front Bench on two occasions. He raised some important issues. He said that ours was a risky strategy. The purpose of the strategy is to bring more properties on to the market by reducing rents, and to that extent—I hope I shall not be quoted out of context—there is a risk involved. But although there is some fairness in that criticism of the policy, it rather militates against the criticism that the Bill is motivated solely by a desire to raise revenue. Again, both cannot be true.
	The hon. Gentleman said that London was not uniform, for a whole raft of reasons. How true that is. There are different property markets in different parts of London, just as there are in different parts of the country. That returns us to the point about the rates of rent. I think the hon. Gentleman was talking about Bromley high street—I shall not make the mistake of getting the geography of his constituency wrong again—but whether on a micro-level or on a sub-regional level, in the round rents reflect supply and demand in the market place. I should have thought that the hon. Gentleman supported that. Indeed, I know he does support it, for I have heard him quote Adam Smith on many occasions.
	I think it was the hon. Gentleman who was worried about roofs blowing off in the night, and asked us to take account of the fact that an empty property might not be fit for use as a result of either a deliberate actof self-vandalism or a windy night. Paragraph 4 of schedule 1 is very specific, having learnt the lessons of the past. It states that the regulations may
	"provide that an act is to be treated as done on behalf of a prescribed person if it is done by any person connected with that person".
	Paragraph 4(1) states that
	"the hereditament shall be deemed not to have changed—
	(a) since before any event of a prescribed description, or
	(b) by reason of any act done by or on behalf of a prescribed person."
	That covers the hon. Gentleman's "windy night" fear.

Phil Woolas: I completely apologise for getting wrong the author of the windy night argument; I cannot think why I did that. We are trying to be fair and to stop tax avoidance. We also want to recognise that there may well be good reasons why a property could not be occupied. I repeat that the Valuation Office will have this matter within its remit, not least of course through its very successful computer database, which is the source of much excitement on the Conservative Benches.
	Newham and Hackney were mentioned. I would not claim to be an expert on the property market in those two parts of London, but Newham is one of the authorities involved in our new targeted 100 per cent. allowance for renovation of long term empty properties. That is a good example of how we are trying to ensure that policies are more locally sensitive. Sometimes we may not get it wholly right, but we do listen to these arguments.
	The admin burdens were referred to and I have tried to cover that point. I have looked at this because although Revenue and Customs is the lead department for the Valuation Office, policy and operational matters are an issue for my Department. We have consulted on that point and we are working closely with the Local Government Association and the Institute of Revenues Rating and Valuation to ensure that we get this right. We are confident on that point.
	My hon. Friend the Member for Stoke-on-Trent, North talked about regeneration and I am familiar with that issue in regard to her constituency. I hope to be able to announce the details of the commission on democracy in Stoke-on-Trent—both its membership and remit—very shortly. I thank my hon. Friend for her assistance in this regard.
	Regeneration is central to our goals in that area. Stoke-on-Trent is an assisted area, with 100 per cent capital allowances. I am grateful for my hon. Friend's comments on the neighbourhood renewal fund and its future. My hon. Friend the Financial Secretary is attending urgent business; I should have put on the record earlier that he had to leave to attend the Finance Bill Committee. I know that he heard what my hon. Friend said; I know that because I kicked him when she said it to ensure that he did. The neighbourhood renewal fund in her area has proved to be very important.
	I come back to my point about low demand and low value; rents are low in areas where properties are empty simply because there is no demand. My hon. Friend raised an important point about listed buildings and we will be looking at that. It is important; we all know of examples of listed buildings that are empty and, perhaps because of their listed status, cannot be rented out. The hon. Member for St. Albans (Anne Main) is not here, but she has informed us of the Rex cinema in St. Albans. I looked into that because I have a love for cinemas. I am looking at why Brixton was able to regenerate its cinema, but St. Albans has not been able to do so thus far. I can see you frowning, Madam Deputy Speaker, so I will move on.
	The hon. Member for Inverness, Nairn, Badenoch and Strathspey talked about the process of the Bill. I hope I have convinced him that we did take seriously the consultation on the Barker and Lyons reviewsand the pre-consultation in the period since. We have had the usual consultation that my hon. Friend the Financial Secretary has talked about, but this is a finance measure coming out of a Budget. There are good reasons for that, but I hope that I can reassure him about the purpose of the Bill and its impact on revenue. The policy will bring about a reduction in rental values, so the revenue we raise from it will diminish over time if we are successful.
	The hon. Gentleman asked whether the policy has been rural-proofed and what information will be placed in the Library. I have answered that by mentioning the regulatory impact assessment. Rural business rate reliefs provide substantial support for rural businesses in respect of empty properties. Every area and sector could, of course, argue for special treatment, but that one is a special case.
	The hon. Gentleman and many other Members asked about the three-month period question. The period is laid down in existing regulations for offices and retail premises, and the Conservative party those regulations. We wish to give all property the same tax treatment.
	The hon. Gentleman asked about reviews of other business rate reliefs and exemptions. We will take forward Sir Michael Lyons's recommendations on that. The hon. Gentleman also asked about social enterprises and companies. To tease him, his party is always asking for certain categories of business to be exempt, but it never points out the consequences of that for other categories of business. To be more serious, however, we will look into that matter, as he made an important point about the growth of the third sector—of social enterprise organisations.
	The hon. Gentleman asked about local councils. I repeat what I said about the support of Hampshire county, Hull, West Sussex, Birmingham, Essex and Kent, because that is a strong point.
	The hon. Member for Surrey Heath accused us of rushing to plunder and argued that the measure would breach the retail prices index cap. That argument misunderstands how the multiplier works. I can give him a lesson on the algebraic formula in clause 1 if he wishes. I should also point out that there are two multipliers, as there is a different one for small businesses—it is not always understood that we provide help to such businesses. The hon. Gentleman then contradicted his argument by saying that we would damage pension funds because rents would decrease. As I have said, both arguments cannot be true. However, the hon. Gentleman was gracious enough to praise the Financial Secretary's thoroughness and eloquence, although he did not say that about my contribution, for which I cannot blame him.  [Interruption.] The hon. Gentleman says from a sedentary position that that goes without saying. He made an eloquent argument that was well researched and based on a false premise—which I suppose is what the journalistic trade teaches its practitioners.
	Some areas of our country have the highest rents in the developed world and also high empty property rates. That is a silly situation, and this policy is intended to change it. We have the RPI cap on the multiplier to protect businesses, and that has proved to be sustainable.
	We have provided ample time for this debate, and we have another debate next week to look forward to, in which we can address matters of detail, rather than of policy and principle, which is the proper subject of a Second Reading debate.
	I believe that I have answered all the questionsasked in our debate, and that the Comptroller ofHer Majesty's Household, my right hon. Friendthe Member for Rutherglen and Hamilton, West (Mr. McAvoy) is happy. My hon. Friend the Minister for Housing and Planning is in the Chamber, so I shall conclude.
	 Question put and agreed to.
	 Bill accordingly read a Second time.

Maria Miller: I am grateful for the opportunity to come to the House and raise an important issue for my constituents in Basingstoke. May I thank the Minister for Housing and Planning for taking the time to come to the House and respond on the Secretary of State's behalf?
	Bramley is a village in the north of my constituency, neighbouring the constituency of my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot). It includes German road where, for the past three years, there have been discussions about house building. The proposals have been rejected, as German road has been deemed unsuitable and unsustainable for development. There has been a great deal of house building in he village over the past decade and little or, indeed, no expansion of local services or improvements to the roads and supporting infrastructure. The village has a very good convenience store and an excellent bakery, but the road that runs through the village feeds into the C32 road and, to the north, there is a surface rail crossing, which is regularly closed to allow freight and passenger traffic to travel between Reading and Basingstoke. Indeed, 99 per cent. of residents in the village leave it in order to shop, and there is no secondary school in the vicinity.
	There are therefore a great many reasons why the village has been deemed unsuitable for further development and, indeed, why the proposals that have been submitted have been deemed unsustainable. We are here today, however, because the Secretary of State is "minded"—in ordinary parlance that means "would like"—to allow house building go ahead. I understand from the office of the Minister for Housing and Planning that she will not discuss the merits of the individual case this evening, and I understand her reasons, as the case is ongoing.
	In questioning the Secretary of State's intervention, it is important to set out the context of the application. Over a three-year period, a local government inspector and an inspector appointed by the Secretary of State herself, as well as the locally elected and accountable Basingstoke and Deane borough council, which is the planning authority, all found after long and detailed investigation and consultation with local residentsthat the proposed scale of development—more than 270 houses were proposed—was wholly unsustainable. Yet the Secretary of State, with no additional new evidence, seeks to overturn those three separate, well thought-out decisions. Even more surprising, the Secretary of State wants to approve a plan that is one third bigger in number of houses to be built than the original plan, which was rejected almost three years go.
	The Secretary of State's main argument is that new residents can come into the village because a train station is located there, and one is indeed—Bramley train station is quite small and has a surface level crossing. She argues that the additional 270 houses would, as a result of the station's presence, put no real additional strain on the local road network. Her own inspector looked closely at this issue in a report issued in February. In it, the inspector said:
	"Bramley is a small village in which shopping, education and employment needs are met to only a limited extent. The appeal site does not occur in a location which would be sufficiently likely to encourage a shift in travel behaviour, away from the private car, for these purposes. Its sustainability is sub-optimal."
	The facts are that fewer than one in five current residents living in close proximity to the station regularly use the train. Given the inspector's findings, if the development were to go ahead, more than 300 additional cars could be on the local roads, which have not been improved to be able to take them. Those roads already suffer from considerable congestion.
	I have heard the Minister talk many times, often at the Dispatch Box, about the need to increase the rate of house building in the south-east of England, and she will perhaps do so this evening. However, I am sure that she is sufficiently well briefed to know that the borough of Basingstoke and Deane has not shied away from Government house building targets. Well in excess of actual local need, the build rate in the borough is more than 900 units a year. Indeed, figures given to me by the council show that last year, well over 1,000 new housing units were built in Basingstoke, so I am sure that the Minister is not about to give the residents of Basingstoke and Deane a lecture about the need to build houses.
	Residents in Old Kempshott lane, in Rooksdown, which is in the constituency of my right hon. Friend the Member for North-East Hampshire, and in Popley, Chineham, Eastrop, Brookvale, King's Furlong and Lychpit are only too aware of the massive rate of house building that is being undertaken in our borough. Indeed, half the wards in the town of Basingstoke are subject to significant house building programmes, yet the borough has only just been given the resources to assess the shortfall in infrastructure.
	Therefore, despite the fact that local elected representatives have produced a well thought-through and commended local plan, in accordance with procedures set out by the Government, that has allocated sites for house building in areas where there is access to schools, shops and other local services, the Secretary of State still feels minded to intervene and potentially to release yet more land for development. Does she simply not trust the local community in Basingstoke to get it right? The plan did not include house building in Bramley, because residents and their elected representatives, as well as two inspectors, could see that the community could not sustain further growth. As the chairman of the parish council,John Ferguson, said to me, the village has reached "saturation point"—a feeling that I am sure residents in many other areas of my constituency can empathise with.
	Indeed, throughout the borough there is a deep and growing concern that insufficient investment is being made in improving local services. Investment simply has not gone hand in hand with Government house building targets over the past 10 years. We now see regularly the consequences of that, which are becoming a cause of deep concern for residents throughout my constituency. There is regular flooding of the sewerage systems in the northern part of the town, and the level of phosphates in the River Loddon is causing concern. The M3, which runs through the centre of my constituency, is consistently running well over capacity. The Minister may be aware that a tragic spate of deaths has resulted from that congestion in the past two years.
	Other issues include a growing problem of rat-running through villages and residential communities. New areas, such as Rooksdown which I mentioned earlier, have few local community facilities to support the families who live there, who often have very young children. We already have an infrastructure gap of more than £200 million on our roads in the area, and I fear that the Government are creating further problems that will be far more costly for us to deal with in the future.
	At every stage of the process, local residents and their very able elected representatives have worked with the inspectors and the planning authority. More than 200 residents directly contributed to the most recent inspection in public. A local ward councillor, Marylyn Tucker, summed up the situation:
	"The site has gone through the democratic process, and at all levels the professionals (including two Inspectors) have ruled against the development, but it appears the Secretary of State believes she knows best.
	What a complete waste of time and money on behalf of the Local Authority, the Local Plan process and the local residents.
	It is no wonder that the electorate have little confidence in government when this is what is seen as democracy."
	Councillor Tucker's words reflect many of our local residents' feelings on this matter.
	I have several specific questions for the Minister who is responding to the debate on behalf of the Secretary of State. First, what new evidence is there that the plan to build more than 270 houses in German road is now sustainable when previously it was deemed not to be? Did the inspector make some serious errors in her report earlier this year, or does the Secretary of State have some special plans to offer money to develop Bramley even further? Perhaps she will offer the new residents a free train pass so that they will use the train rather than their cars. I would be interested to know what plans she has to make the development more sustainable.
	Both the Secretary of State and the planning inspector agree that the proposal is not in compliance with the local development plan, because it is outside the settlement policy boundary of Bramley, it would increase dependency on the car, and the scale of the proposals has increased significantly since the original proposal was submitted. Did the elected representatives and the local planning authority get it wrong? What mistake did they make to lead the Secretary of State to want to intervene?
	There was extensive consultation with the people of Bramley and the people of Basingstoke on the local plan, but the Secretary of State can override that from afar. What message does the Minister think that that sends to my constituents about the usefulness of being involved in future so-called consultations, especially on planning issues or of the involvement of local government in the planning process?
	As the Minister will be aware, the problem in Basingstoke, and indeed in many other areas of the south-east, is not a shortage of land on which to build but the rate at which builders are prepared to bring houses on to the market. A number of major developments have significantly slowed their build rate as too many new developments are coming on to the market in Basingstoke. Although the Government would like to control all aspects of house building more closely, the Minister—who, like me, is an alumnus of the London School of Economics—will understand that she still has to rely on market forces and the need of developers to make a profit on the houses that they sell. What evidence does she have that overriding the local plan in this way will not just lead to other developments slowing their build rate?
	"There is a duty in the modern constitution to ensure the best possible consultation throughout out society. Public consultation is a mark of a mature democracy, not only when Government seeks to make major legislative changes—for example over taxation—but also at a smaller scale when new developments are planned. We must also ensure the fullest democratic participation in decisions".
	Those are fine words indeed, and they were used by our Prime Minister-in-waiting when he was still just the Chancellor. There has been an exhaustive consultation about the decision, but is the Minister for Housing and Planning happy that the Secretary of State is putting into practice the words of the man who will soon be her party leader? Or does she agree with local residents in Bramley and Basingstoke that consultation and democratic participation take on very different meanings when used in connection with the Secretary of State's current approach to planning?

Yvette Cooper: I congratulate the hon. Member for Basingstoke (Mrs. Miller) on securing this debate. She has set out her concerns about the role of the Secretary of State in the planning application in respect of German road, Bramley.
	The hon. Lady was right to say at the beginning of her remarks that I am very constrained in what I can say in the House about these matters. The case is still under consideration by my right hon. Friend the Secretary of State, so it would not be appropriate for me to comment on the matters that she has raised. I am unable to take action that could prejudge the determination of the planning decision.
	However, I can tell the House that my right hon. Friend the Secretary of State wrote to the parties involved on 3 April 2007 indicating that she is minded to disagree with the inspector and to grant planning permission, subject to conditions and in particular subject to receipt of a satisfactory reformulated planning obligation in respect of securing the appropriate provision of affordable housing. The parties involved have been asked to submit such an obligation and any other representation by 3 July this year. Subject to the substance of those submissions, I understand that it is anticipated that a decision would be issued on or before 2 August.
	The hon. Member for Basingstoke will knowthat clear procedures exist for the determination of planning cases. Such cases involve private as well as community interests, so it is appropriate that the procedures are properly followed to ensure that decisions are fair to all sides and appropriately transparent. She will appreciate too that my right hon. Friend the Secretary of State's role in such cases is quasi-judicial, and that it is therefore inappropriate for Ministers to debate cases in Parliament while they are passing through the process.
	In addition, I am afraid that we are also unable to have a slightly wider debate that uses an individual case as an example, as to do so could give the appearance that we were prejudging the case, which would be inappropriate. The hon. Member for Basingstoke will want to ensure that the views of her constituents and of everyone involved in the case are fairly taken into account and are not prejudiced by the debate.
	However, I can draw the attention of the hon. Member for Basingstoke to the letter of 3 April, which sets out the Secretary of State's consideration of the development plan, the sustainability of the site, transportation matters and planning policy guidance note 13. It also sets out my right hon. Friend's consideration of housing matters and planning policy statement 3, and of the relevant conditions under section 106 of the Town and Country PlanningAct 1990. Finally, it sets out my right hon. Friend's conclusions in the light of those considerations. I am afraid that it would be inappropriate for me to comment further, and I am also unable to comment on the relationship between the application and the wider plans for the district.
	The hon. Lady raised wider issues around the need for infrastructure and for housing. I preface my comments on those two wider issues by saying that I am not commenting on them with regard to their implications for this individual case. As I have made it clear, it would not be appropriate for me to do so. We believe that there is a need for more investment in infrastructure to support housing growth across the country. That is why we have been looking at issues around planning gain supplement and why we have been working with areas, such as Milton Keynes, on ideas around tariff. She has to recognise that infrastructure requires investment and that that investment needs to be found. I hope that she will urge her Front Bench to support additional investment in infrastructure across the country.
	The hon. Lady may be aware that the national housing and planning advice unit has today published a report that looks at the impact of affordability on current and planned levels of house building and concludes that if more homes are not built, there will be a big increase in pressures on first-time buyers over the next 20 years and that this is a serious matter.

Maria Miller: Part of the Secretary of State's comments when she presented the White Paper concerned the importance of consultation and the fact that it should be at the heart of the planning process. To return to my earlier comments, what message canI take back to my constituents? When next the Government ask them to participate in a consultation, they will merely say, "It didn't get us very far last time, did it?"

Yvette Cooper: All that I can say again is that there are processes to be followed in planning cases. Processes throughout the planning system involve consultation, including extensive consultation with local communities, especially at the plan-making stage. There are different opportunities to put views forward, but it is not appropriate for the House and Ministersto engage in detailed debates about a planning application. It is important that the procedures are properly and fairly followed. I know that hon. Members generally respect that process and recognise that it is an appropriate way for decisions to be taken. I hope that the hon. Lady will recognise that I am trying as best I can to respond to the points that she has made, but I am not prepared to go outside the clearly set planning guidelines. It would not be fair on her constituents or on anyone else for me to do so.
	With that, I congratulate the hon. Lady again on securing the debate. The Secretary of State will certainly take all relevant issues into account when making her final decision.
	 Question put and agreed to.
	 Adjourned accordingly at half-past Five o'clock.